Nuclear factor (NF)-kappaB activation has been clearly linked to the pathogenesis of multiple inflammatory diseases including arthritis. The central role that IkappaB kinase-2 (IKK-2) plays in regulating NF-kappaB signaling in response to inflammatory stimuli has made this enzyme an attractive target for therapeutic intervention. Although diverse chemical classes of IKK-2 inhibitors have been identified, the binding kinetics of these inhibitors has limited the scope of their applications. In addition, safety assessments of IKK-2 inhibitors based on a comprehensive understanding of the pharmacokinetic/pharmacodynamic relationships have yet to be reported. Here, we describe a novel, potent, and highly selective IKK-2 inhibitor, PHA-408 [8-(5-chloro-2-(4-methylpiperazin-1-yl)isonicotinamido)-1-(4-fluorophenyl)-4,5-dihydro-1H-benzo[g]indazole-3-carboxamide]. PHA-408 is an ATP-competitive inhibitor, which binds IKK-2 tightly with a relatively slow off rate. In arthritis-relevant cells and animal models, PHA-408 suppresses inflammation-induced cellular events, including IkappaBalpha phosphorylation and degradation, p65 phosphorylation and DNA binding activity, the expression of inflammatory mediators, and joint pathology. PHA-408 was efficacious in a chronic model of arthritis with no adverse effects at maximally efficacious doses. Stemming from its ability to bind tightly to IKK-2, as a novelty, we demonstrated that PHA-408-mediated inhibition of IKK-2 activity correlated very well with its ability to modulate the fate of IKK-2 substrates and downstream transcriptional events. We ultimately directly linked IKK-2 activity ex vivo and in vivo to markers of inflammation with the inhibitor plasma concentrations. Thus, PHA-408 represents a powerful tool to further gain insight into the mechanisms by which IKK-2 regulates NF-kappaB signaling and validates IKK-2 as a therapeutic target.