Stress-activated mitogen-activated protein (MAP) kinase p38 mediates stress signaling in mammalian cells via threonine and tyrosine phosphorylation in its conserved TGY motif by upstream MAP kinase kinases (MKKs). In addition, p38 MAP kinase can also be activated by an MKK-independent mechanism involving TAB-1 (TAK-1-binding protein)-mediated autophosphorylation. Although TAB-1-mediated p38 activation has been implicated in ischemic heart, the biological consequences and downstream signaling of TAB-1-mediated p38 activation in cardiomyocytes is largely unknown. We show here that TAB-1 expression leads to a significant induction of p38 autophosphorylation and consequent kinase activation in cultured neonatal cardiomyocytes. In contrast to MKK3-induced p38 kinase downstream effects, TAB-1-induced p38 kinase activation does not induce expression of pro-inflammatory genes, cardiac marker gene expression, or changes in cellular morphology. Rather, TAB-1 binds to p38 and prevents p38 nuclear localization. Furthermore, TAB-1 disrupts p38 interaction with MKK3 and redirects p38 localization in the cytosol. Consequently, TAB-1 expression antagonizes the downstream activity of p38 kinase induced by MKK3 and attenuates interleukin-1beta-induced inflammatory gene induction in cardiomyocytes. These data suggest that TAB-1 can mediate MKK-independent p38 kinase activation while negatively modulating MKK-dependent p38 function. Our study not only redefines the functional role of TAB-1 in p38 kinase-mediated signaling pathways but also provides the first evidence that intracellular localization of p38 kinase and complex interaction dictates its downstream effects. These results suggest a previously unknown mechanism for stress-MAP kinase regulation in mammalian cells.