Reactive oxygen species (ROS) have been demonstrated to act as second messengers in a number of signal transduction pathways, including NFkappaB. However, the mechanism(s) by which ROS regulate NFkappaB remain unclear and controversial. In the present report, we describe a mechanism whereby interleukin-1beta (IL-1beta) stimulation of NFkappaB is partially regulated by H2O2-mediated activation of NIK and subsequent NIK-mediated phosphorylation of IKKalpha. IL-1beta induced H2O2 production in MCF-7 cells and clearance of this ROS through the expression of GPx-1 reduced NFkappaB transcriptional activation by inhibiting NIK-mediated phosphorylation of IKKalpha. Although IKKalpha and IKKbeta were both involved in IL-1beta-mediated activation of NFkappaB, only the IKKalpha-dependent component was modulated by changes in H2O2 levels. Interestingly, in vitro reconstitution experiments demonstrated that NIK was activated by a very narrow range of H2O2 (1-10 microM), whereas higher concentrations (100 microM to 1 mM) inhibited NIK activity. Treatment of cells with the general Ser/Thr phosphatase inhibitor (okadaic acid) lead to activation of NFkappaB and enhanced NIK activity as a IKKalpha kinase, suggesting that ROS may directly regulate NIK through the inhibition of phosphatases. Recruitment of NIK to TRAF6 following IL-1beta stimulation was inhibited by H2O2 clearance and Rac1 siRNA, suggesting that Rac-dependent NADPH oxidase may be a source of ROS required for NIK activation. In summary, our studies have demonstrated that redox regulation of NIK by H2O2 is mechanistically important in IL-1beta induction of NFkappaB activation.