Proteolytic processing of the nuclear factor (NF)-kappaB2 precursor protein p100 generates the active NF-kappaB2 subunit p52, which in turn transcriptionally up-regulates p100 expression. p100 also functions as an IkappaB molecule capable of repressing p52 activity. The biological significance of this negative feedback control loop has yet to be demonstrated in vivo. Here we show that mice deficient in p100 but with constitutive expression of p52 in lymphocytes developed fatal lung inflammation characterized by diffuse alveolar damage with marked peribronchial fibrosis. In contrast, their littermates with only p100 deficiency or constitutive expression of p52 in lymphocytes developed mild lung inflammation with perivascular lymphocyte infiltration and had a normal life span. The fatal lung inflammation is associated with high-level induction of interferon-gamma and its inducible inflammatory chemokines, suggesting the involvement of a T-helper-1 immune response. These findings demonstrate the physiological relevance of the NF-kappaB2 p100 precursor protein in limiting the potentially detrimental effects of constitutive NF-kappaB2 signaling in lymphocytes.