The molecular mechanisms regulating monocyte differentiation to macrophages remain unknown. Although the transcription factor NF-kappaB participates in multiple cell functions, its role in cell differentiation is ill defined. Since differentiated macrophages, in contrast to cycling monocytes, contain significant levels of NF-kappaB in the nuclei, we questioned whether this transcription factor is involved in macrophage differentiation. Phorbol 12-myristate 13-acetate (PMA)-induced differentiation of the promonocytic cell line U937 leads to persistent NF-kappaB nuclear translocation. We demonstrate here that an increased and persistent IKK activity correlates with monocyte differentiation leading to persistent NF-kappaB activation secondary to increased IkappaBalpha degradation via the IkappaB signal response domain (SRD). Promonocytic cells stably overexpressing an IkappaBalpha transgene containing SRD mutations fail to activate NF-kappaB and subsequently fail to survive the PMA-induced macrophage differentiation program. The differentiation-induced apoptosis was found to be dependent on tumor necrosis factor alpha. The protective effect of NF-kappaB is mediated through p21(WAF1/Cip1), since this protein was found to be regulated in an NF-kappaB-dependent manner and to confer survival features during macrophage differentiation. Therefore, NF-kappaB plays a key role in cell differentiation by conferring cell survival that in the case of macrophages is mediated through p21(WAF1/Cip1).