The inhibitory kappaB (IkappaB)-like (IkappaBL) gene is located within the Class III region of the MHC on human chromosome 6. Previous analysis of the predicted amino acid sequence of the human IkappaBL protein revealed three putative functional domains; 2-3 ankyrin repeat sequences, which are similar to the second and third ankyrin repeats of the nuclear factor kappaB (NF-kappaB) protein; three PEST sequence motifs (a sequence that is rich in proline, serine, aspartic acid and threonine residues), which are also found in other IkappaB family members; and a C-terminal leucine zipper-like motif. In the present study we have identified a novel bipartite motif, which is required for nuclear localization of the IkappaBL protein. Analyses of IkappaBL-specific transcripts revealed the existence of a widely expressed spliced variant form of IkappaBL (IkappaBLsv1), which lacks the amino acid sequence GELEDEWQEVMGRFE (where single-letter amino-acid notation has been used). Interestingly, translation of IkappaBL mRNA in vivo was found to initiate predominantly from the second available methionine, thereby resulting in the disruption of the predicted N-terminal PEST sequence. Also, transient expression of T7 epitope-tagged IkappaBL and IkappaBLsv1 proteins in mammalian cells showed that both proteins were targeted to the nucleus, where they accumulate in nuclear speckles. To define the protein domains required for nuclear import and subnuclear localization, a complementary set of deletion mutants and enhanced green fluorescent protein-IkappaBL domain fusions were expressed in mammalian cells. Data from these experiments show that a combination of the ankyrin-repeat region and an adjacent arginine-rich sequence are necessary and sufficient for both nuclear import and speckle localization.