Phosphorylation of IkappaB, an inhibitor of NF-kappaB, is an important step in the activation of the transcription factor NF-kappaB. Phosphorylation is mediated by the IkappaB kinase (IKK) complex, known to contain two catalytic subunits: IKKalpha and IKKbeta. A novel, noncatalytic component of this kinase complex called NEMO (NF-kappaB essential modulator)/IKKgamma was identified recently. We have generated NEMO/IKKgamma-deficient mice by gene targeting. Mutant embryos die at E12.5-E13.0 from severe liver damage due to apoptosis. NEMO/IKKgamma-deficient primary murine embryonic fibroblasts (MEFs) lack detectable NF-kappaB DNA-binding activity in response to TNFalpha, IL-1, LPS, and Poly(IC) and do not show stimulus-dependent IkappaB kinase activity, which correlates with a lack of phosphorylation and degradation of IkappaBalpha. Consistent with these data, mutant MEFs show increased sensitivity to TNFalpha-induced apoptosis. Our data provide in vivo evidence that NEMO/IKKgamma is the first essential, noncatalytic component of the IKK complex.