NF-kappa B is a heterodimeric protein composed of two subunits, p50 and p65, and is sequestered in the cytoplasm as an inactive form through the association with an inhibitory protein, I kappa B. In the present study, the effect of HTLV-I encoded Tax on the exogenously expressed NF-kappa B p105, which encodes a precursor of p50, was investigated using a COS-7 expression system. When p105 was expressed in COS-7 cells, the precursor p105 and the processed p50 were retained in the cytosolic fraction by associating each other, and p50 was not detected in the nuclear fraction. In the cells co-expressing p105 and Tax, the p50/p105 ratio in the cytosolic fraction reduced with an induction of p50 in the nuclear fraction, which gave rise to a significant increase in NF-kappa B binding activity. Enhancement of NF-kappa B binding activity was not observed by adenovirus encoded E1A and bovine papilloma virus encoded E2, and correlated well with the ability of Tax to associate with p105. When p105 delta X which lacks the repeats of the ankyrin motif was expressed in this system, p105 delta X and processed p50 were detected in the nuclear fraction and p50/p105 delta X ratio was not affected by co-expression with Tax. In the same expression system, exogenously expressed NF-kappa B p65 was retained in the cytoplasm by p105 and further expression of Tax allowed entry of p65 in the nucleus. These results suggest that, in this model system, p105 acts as an I kappa B to sequester p50 and p65 in the cytoplasm and that Tax by inhibiting I kappa B activity of p105, enhances nuclear localization of p50 and p65. These findings raise a possibility for a novel mechanism for the induction of NF-kappa B in the nucleus by Tax.