Activation of the transcription factor NF-kappa B is a paradigm for signal transduction through the ubiquitin-proteasome pathway: ubiquitin-dependent degradation of the transcriptional inhibitor I kappa B in response to cell stimulation. A major issue in this context is the nature of the recognition signal and the targeting enzyme involved in the proteolytic process. Here we show that following a stimulus-dependent phosphorylation, and while associated with NF-kappa B, I kappa B is targeted by a specific ubiquitin-ligase via direct recognition of the signal-dependent phosphorylation site; phosphopeptides corresponding to this site specifically inhibit ubiquitin conjugation of I kappa B and its subsequent degradation. The ligase recognition signal is functionally conserved between I kappa B alpha and I kappa B beta, and does not involve the nearby ubiquitination site. Microinjection of the inhibitory peptides into stimulated cells abolished NF-kappa B activation in response to TNF alpha and the consequent expression of E-selectin, an NF-kappa B-dependent cell-adhesion molecule. Inhibition of NF-kappa B function by specific blocking of ubiquitin ligase activity provides a novel approach for intervening in cellular processes via regulation of unique proteolytic events.