NF-κB essential modulator (NEMO) regulates NF-κB signaling by acting as a scaffold for the kinase IKKβ to direct its activity toward the NF-κB inhibitor, IκBα. Here, we show that a highly conserved central region of NEMO termed the intervening domain (IVD, amino acids 112-195) plays a key role in NEMO function. We determined a structural model of full-length NEMO by small-angle X-ray scattering and show that full-length, wild-type NEMO becomes more compact upon binding of a peptide comprising the NEMO binding domain of IKKβ (amino acids 701-745). Mutation of conserved IVD residues (9SG-NEMO) disrupts this conformational change in NEMO and abolishes the ability of NEMO to propagate NF-κB signaling in cells, although the affinity of 9SG-NEMO for IKKβ compared to that of the wild type is unchanged. On the basis of these results, we propose a model in which the IVD is required for a conformational change in NEMO that is necessary for its ability to direct phosphorylation of IκBα by IKKβ. Our findings suggest a molecular explanation for certain disease-associated mutations within the IVD and provide insight into the role of conformational change in signaling scaffold proteins.