The neural cell adhesion molecule, N-CAM, is expressed on the surface of astrocytes and neurons, and N-CAM homophilic binding has been shown to alter gene expression in both of these cell types. To determine mechanisms by which N-CAM regulates gene expression, we have analyzed DNA binding of and transcriptional activation by NF-kappaB after N-CAM binding to the cell surface. Addition of purified N-CAM, the recombinant third immunoglobulin domain of N-CAM, or N-CAM antibodies either to neonatal rat forebrain astrocytes or to cerebellar granule neurons increased NF-kappaB/DNA binding activity in nuclear extracts as measured by electrophoretic mobility shift assays. Analysis using supershifting antibodies indicated that, in both cell types, p50 and p65 but not p52, c-Rel, or Rel B were contained in the NF-kappaB-binding complex. NF-kappaB-mediated transcription was increased after N-CAM binding to astrocytes and neurons as demonstrated by the activation of two different luciferase reporter constructs containing NF-kappaB-binding sites. N-CAM binding also resulted in degradation of IkappaB-alpha protein followed by an increase in the levels of IkappaB-alpha mRNA and protein. These results indicate that N-CAM homophilic binding at the cell membrane leads to increased NF-kappaB binding to DNA and transcriptional activation in both neurons and astrocytes. Activation of NF-kappaB, however, did not influence the previously reported ability of N-CAM to inhibit astrocyte proliferation. These observations together support the hypothesis that N-CAM binding activates multiple pathways leading to changes in gene expression in both astrocytes and neurons.