The p50 subunit of NF-kappa B is apparently synthesized as a precursor molecule of 105 kDa (p105); subsequent processing releases the amino-terminal p50 polypeptide with rel homology, DNA binding activity and transcriptional activation potential. The carboxy-terminal region of p105 contains seven copies of an ankyrin-related sequence previously found in several genes involved in differentiation and cell cycle control. Two proteins with I kappa B activity, MAD-3 and pp40, have been cloned and found to contain five obvious ankyrin repeats that align with those in the carboxy-terminus of p105. Both proteins target their inhibitory activity to the p65 subunit of NF-kappa B and to c-rel. Here we show that the bacterially expressed and purified carboxy-terminal region (CTR) of p105 abolishes the binding of p50 homodimers to a kappa B motif but minimally affects the binding of p65 homodimers and NF-kappa B. By contrast, MAD-3 inhibits the binding of p65 and NF-kappa B but not p50. Both the CTR and MAD-3 interact with their respective targets through physical association both in vitro and in vivo. The CTR can be expressed as an independent entity and thus may play two roles, as a cis inhibitor built into the p105 molecule and as a trans regulator of p50.