Notch/RBP-Jkappa and nuclear factor-kappaB (NFkappaB) complexes are key mediators of the progression of many cellular events through the activation of specific target gene transcription. Independent observations have shown that activation of Notch-dependent transcription generally correlates with inhibition of differentiation. In contrast, activated NFkappaB complexes are required for progression of differentiation in several systems. Although some interactions between both pathways have been observed, the physiological significance of their connection is unclear. We have now demonstrated that the increase in p65-NFkappaB protein levels enhances Notch-mediated activation of the Hes1 promoter up to three-fold. This effect does not require NFkappaB transcriptional activity, and it is independent of the previously described interaction between Notch and p50-NFkappaB. Furthermore, we show that p65-NFkappaB can modulate subcellular localization of the transcriptional corepressor N-CoR, abrogating N-CoR mediated repression of the Hes1 promoter. In addition, p65-NFkappaB is able to upregulate not only the Hes1 but also other promoters containing SRE and AP-1 sites, which are repressed by N-CoR. Thus, we conclude that p65-NFkappaB can regulate gene expression by a general mechanism that involves cytoplasmic translocation of the transcriptional corepressor protein N-CoR.