The receptor interacting protein kinase 1 (RIP1) is essential for the activation of nuclear factor kappaB (NF-kappaB) by tumor necrosis factor alpha (TNFalpha). Here, we present evidence that TNFalpha induces the polyubiquitination of RIP1 at Lys-377 and that this polyubiquitination is required for the activation of IkappaB kinase (IKK) and NF-kappaB. A point mutation of RIP1 at Lys-377 (K377R) abolishes its polyubiquitination as well as its ability to restore IKK activation in a RIP1-deficient cell line. The K377R mutation of RIP1 also prevents the recruitment of TAK1 and IKK complexes to TNF receptor. Interestingly, polyubiquitinated RIP1 recruits IKK through the binding between the polyubiquitin chains and NEMO, a regulatory subunit of the IKK complex. Mutations of NEMO that disrupt its polyubiquitin binding also abolish IKK activation. These results reveal the biochemical mechanism underlying the essential signaling function of NEMO and provide direct evidence that signal-induced site-specific ubiquitination of RIP1 is required for IKK activation.