The nuclear translocation of NF-kappa B follows the degradation of its inhibitor, I kappa B alpha, an event coupled with stimulation-dependent inhibitor phosphorylation. Prevention of the stimulation-dependent phosphorylation of I kappa B alpha, either by treating cells with various reagents or by mutagenesis of certain putative I kappa B alpha phosphorylation sites, abolishes the inducible degradation of I kappa B alpha. Yet, the mechanism coupling the stimulation-induced phosphorylation with the degradation has not been resolved. Recent reports suggest a role for the proteasome in I kappa B alpha degradation, but the mode of substrate recognition and the involvement of ubiquitin conjugation as a targeting signal have not been addressed. We show that of the two forms of I kappa B alpha recovered from stimulated cells in a complex with RelA and p50, only the newly phosphorylated form, pI kappa B alpha, is a substrate for an in vitro reconstituted ubiquitin-proteasome system. Proteolysis requires ATP, ubiquitin, a specific ubiquitin-conjugating enzyme, and other ubiquitin-proteasome components. In vivo, inducible I kappa B alpha degradation requires a functional ubiquitin-activating enzyme and is associated with the appearance of high molecular weight adducts of I kappa B alpha. Ubiquitin-mediated protein degradation may, therefore, constitute an integral step of a signal transduction process.