The candidate proto-oncogene bcl-3 encodes a protein that shares structural features with IKB-~ and other proteins that bind to members of the Rel protein family. Here, we show that in contrast to the inhibitory activity of IKB-a, the bcl-3 gene product superactivates NF-KB p50 homodimer-mediated gene expression both in vivo and in vitro. BCL-3 protein can, as well, selectively associate with p50 homodimers in the presence of DNA containing a KB motif. These results strongly suggest that BCL-3 can act as a transcriptional coactivator, acting through DNA-bound pS0 homodimers.[Key Words: NF-KB; p50; IKB; transcription; coactivator]Received January 8, 1993; revised version accepted May 21, 1993.The candidate proto-oncogene bcl-3 was identified by the cloning of chromosomal breakpoints from chronic lymphocytic leukemia cells containing a t(14;19) translocation (Ohno et al. 1990). bcl-3 expression is activated by translocation without apparent alteration of the encoded protein structure. The deduced primary structure of BCL-3 contains seven repeats of an -30-amino-acid motif (ankyrin repeat) found in several other proteins (Nolan and Baltimore 1992). These include erythrocyte ankyrin, a cytoskeletal protein; yeast cell cycle regulatory proteins, such as cdclO and SWI6; and the transmembrane receptors notch, TAN1, and int-3.