In previous studies we reported that stimulation of rat mesangial cells (RMC) with lipopolysaccharide (LPS) + tumor necrosis factor alpha (TNF-alpha) (L/T) elicits inducible nitric oxide synthase (NOS2) mRNA expression, which is inhibited by dexamethasone (DX). We have now analyzed the mechanisms responsible for this inhibitory effect. Dexamethasone had no destabilizing effect on NOS2 mRNA. Transfection of RMC with several luciferase reporter constructs from the 5' flanking regulatory region of the rat NOS2 gene established the importance of the NF-kappa B site in the transcriptional activation of the NOS2 gene. DNA mobility shift assays showed activation by L/T of the NF-kappa B complex in a time-dependent manner. Dexamethasone specifically inhibited this activation in a process dependent on the glucocorticoid receptor and with a markedly greater effect when it was added prior to L/T. Dexamethasone increased the expression of the I kappa B-alpha transcript and protein in the cytoplasm. While treatment of RMC with L/T induced the transient decrement of cytoplasmic p65 levels and its appearance in the nucleus, preincubation with DX prevented this effect. Co-immunoprecipitation and immunocytochemical studies demonstrated that I kappa B-alpha is associated with p65 in the cytoplasm of RMC after treatment with DX and L/T. These results prove that inhibition of NF-kappa B-mediated transcription is a crucial mechanism by which DX inhibits NOS2 expression, and that this occurs by increasing cytoplasmic I kappa B-alpha levels and sequestering the activating subunits of NF-kappa B in the cytoplasm. The need for previous induction of I kappa B-alpha could provide a molecular explanation for the limited efficacy of these agents in the therapy of septic shock.