The human immunodeficiency virus type 1 (HIV-1) Vpu protein binds to the CD4 receptor and induces its degradation by cytosolic proteasomes. This process involves the recruitment of human betaTrCP (TrCP), a key member of the SkpI-Cdc53-F-box E3 ubiquitin ligase complex that specifically interacts with phosphorylated Vpu molecules. Interestingly, Vpu itself, unlike other TrCP-interacting proteins, is not targeted for degradation by proteasomes. We now report that, by virtue of its affinity for TrCP and resistance to degradation, Vpu, but not a phosphorylation mutant unable to interact with TrCP, has a dominant negative effect on TrCP function. As a consequence, expression of Vpu in HIV-infected T cells or in HeLa cells inhibited TNF-alpha-induced degradation of IkappaB-alpha. Vpu did not inhibit TNF-alpha-mediated activation of the IkappaB kinase but instead interfered with the subsequent TrCP-dependent degradation of phosphorylated IkappaB-alpha. This resulted in a pronounced reduction of NF-kappaB activity. We also observed that in cells producing Vpu-defective virus, NF-kappaB activity was significantly increased even in the absence of cytokine stimulation. However, in the presence of Vpu, this HIV-mediated NF-kappaB activation was markedly reduced. These results suggest that Vpu modulates both virus- and cytokine-induced activation of NF-kappaB in HIV-1-infected cells.