The nuclear form of the NF-kappa B transcription factor binds to DNA as a heterodimer of a 50 kDa (p50) and 65 kDa (p65) polypeptide. The two polypeptides are encoded by different genes but share a long region of homology, the NRD motif, encompassing domains required for DNA binding and dimerization. In this study we have analysed the contribution of the two subunits to the strong transactivating potential of NF-kappa B. Transient expression of the p65 subunit alone resulted in a potent transactivation of a CAT reporter construct under the control of two NF-kappa B binding sites in monkey COS and mouse L cells. The strongly DNA binding p50 subunit showed only very weak, if any, induction of gene expression. Co-expression of p50 suppressed the transactivation by p65 presumably by competitive DNA binding of transcriptionally inactive p50 dimers (KBF1). Fusion of p65 sequences to DNA binding domain of the yeast GAL4 transcription factor allowed detection of the principal transactivation domain of p65 (TA1) in the C-terminal 30 amino acid sequence. TA1 is likely to adopt an amphipathic alpha-helical structure which clusters serine residues on the hydrophilic surface, a structural feature conserved between human, mouse and Xenopus p65. The unique C-terminal third of p65 contained at least one more activation domain, TA2, within a 90 amino acid sequence directly adjacent to TA1. In two mammalian cell lines, TA1 and TA2 acted separately, while in an insect cell line, the two domains were inactive after their separation. Our study suggests that the p50 subunit in NF-kappa B might only serve a helper function in DNA binding whereas the p65 subunit is responsible for initiating transcription. Homodimers of p50 seem to have the potential of down-regulating kappa B-specific gene expression.