p105 plays dual roles in NF-kappaB signaling: in its precursor form it inhibits NF-kappaB activation, but limited processing by the ubiquitin system generates the p50 active subunit of the transcription factor. Here we show that ABIN-1, an A20-binding protein that is also known to attenuate NF-kappaB activation, inhibits p105 processing. p105 and ABIN-1 physically interact with one another, but the binding is not necessary for inhibition of processing. Rather, it appears to stabilize ABIN-1 and to increase its level, which further augments its inhibitory effect. Deletion of the processing inhibitory domain (PID) of p105 abrogates the inhibition which also requires the ABIN homology domain (AHD)-2 of ABIN-1. Together, the effects of ABIN-1 on p105 processing and of p105 on stabilizing ABIN-1 act to potentiate the NF-kappaB inhibitory activity of ABIN-1.