The switching on-and-off of I-kappaB kinase (IKK) and NF-kappaB occurs rapidly after signaling. How activated IKK becomes down-regulated is not well understood. Here we show that following tumor necrosis factor-alpha stimulation, protein phosphatase 2A (PP2A) association with IKK is increased. A heptad repeat in IKKgamma, helix 2 (HLX2), mediates PP2A recruitment. Two other heptad repeats downstream of HLX2, termed coiled-coil region 2 (CCR2) and leucine zipper (LZ), bind HLX2 and negatively regulate HLX2 interaction with PP2A. HTLV-1 transactivator Tax also binds HLX2, and this interaction is enhanced by CCR2 but reduced by LZ. In the presence of Tax, PP2A-IKKgamma binding is greatly strengthened. Interestingly, peptides spanning CCR2 and/or LZ disrupt IKKgamma-Tax and IKKgamma-PP2A interactions and potently inhibit NF-kappaB activation by Tax and tumor necrosis factor-alpha. We propose that when IKK is resting, HLX2, CCR2, and LZ form a helical bundle in which HLX2 is sequestered. The HLX2-CCR2-LZ bundle becomes unfolded by signal-induced modifications of IKKgamma or after Tax binding. In this conformation, IKK becomes activated. IKKgamma then recruits PP2A via the exposed HLX2 domain for rapid down-regulation of IKK. Tax-PP2A interaction, however, renders PP2A inactive, thus maintaining Tax-PP2A-IKK in an active state. Finally, CCR2 and LZ possibly inhibit IKK activation by stabilizing the HLX2-CCR2-LZ bundle.