In this report, we investigate the evolution of transcription factor NF-κB by examining its structure, activity, and regulation in two protists using phylogenetic, cellular, and biochemical techniques. In Capsaspora owczarzaki (Co), we find that full-length NF-κB has an N-terminal DNA-binding domain and a C-terminal Ankyrin (ANK) repeat inhibitory domain, and its DNA-binding activity is more similar to metazoan NF-κB rather than Rel proteins. As with mammalian NF-κB proteins, removal of the ANK repeats is required for Co-NF-κB to enter the nucleus, bind DNA, and activate transcription. However, C-terminal processing of Co-NF-κB is not induced by co-expression of IKK in human cells. Exogenously expressed Co-NF-κB localizes to the nucleus in Co cells. NF-κB mRNA and DNA-binding levels differ across three life stages of Capsaspora, suggesting distinct roles for NF-κB in these life stages. RNA-seq and GO analyses identify possible gene targets and biological functions of Co-NF-κB. We also show that three NF-κB-like proteins from the choanoflagellate Acanthoeca spectabilis (As) all consist of primarily the N-terminal conserved Rel Homology domain sequences of NF-κB, and lack C-terminal ANK repeats. All three As-NF-κB proteins constitutively enter the nucleus of human and Co cells, but differ in their DNA-binding and transcriptional activation activities. Furthermore, all three As-NF-κB proteins can form heterodimers, indicating that NF-κB diversified into multi-subunit families at least two times during evolution. Overall, these results present the first functional characterization of NF-κB in a taxonomic kingdom other than Animalia and provide information about the evolution and diversification of this biologically important transcription factor.