Proinflammatory activation of NF-kappaB requires an upstream kinase complex (IkappaB-kinase; IKK) composed of two catalytic subunits (IKKalpha and IKKbeta) and a noncatalytic regulatory component named NEMO (NF-kappaB essential modulator). NEMO interacts with a COOH-terminal sequence within both IKKs termed the NEMO-binding domain (NBD), and a cell-permeable NBD peptide blocks NEMO/IKKbeta interactions and inhibits tumor necrosis factor-alpha-induced NF-kappaB. We report here that a peptide encompassing the NBD not only blocked association of both IKKs with NEMO but also disrupted preformed NEMO/IKK complexes in vitro. Furthermore, peptide blocking and alanine-scanning mutation studies revealed differences between the NBDs of IKKalpha and IKKbeta, and mutational analysis of the IKKbeta NBD identified the physical properties required at each position to maintain association with NEMO. Finally, we demonstrate that loss of NEMO-binding by IKKbeta through deletion of the NBD renders it catalytically active and that potential phosphorylation within the IKKbeta NBD may serve as a signal to down-regulate IKK activity. Our findings therefore provide critical insight into the physical properties of the NBD that will be valuable for the design of drugs aimed at disrupting the IKK complex and also reveal potential regulatory mechanisms controlling the function of the IKK complex.