The human T-cell leukemia virus type I Tax protein transforms T cells through induced expression of many cellular genes, including those encoding the growth-related proteins interleukin 2 and the alpha chain of its receptor. Induction of these genes is mediated, at least in part, through Tax-dependent posttranslational activation of NF-kappa B, typically heterodimers of p50 (NF-kappa B1) and p65 (RelA). The preexisting NF-kappa B proteins are retained in the cytoplasm of cells by association with inhibitory ankyrin-motif-containing I kappa B proteins, primarily I kappa B-alpha but also including the precursor proteins p105 (NF-kappa B1) and p100 (NF-kappa B2). Here we demonstrate the existence of a previously undescribed multimeric cytoplasmic complex in which NF-kappa B dimers are associated with the p100 inhibitor in a manner dependent on the precursor protein's ankyrin domain. We also demonstrate an antagonistic effect of the Tax protein on the cytoplasmic sequestration function of p100; this in turn leads to nuclear translocation of NF-kappa B dimers liberated from multimeric complexes. Tax may exert these effects through the physical association with p100. Tax also relieves the p100-mediated inhibition of DNA binding by p50-p65 heterodimers in vitro. The results demonstrate a mechanism by which Tax may activate NF-kappa B in T cells.