T cell receptor (TCR) signaling to IKB kinase (IKK)/NFKB is controlled by PKC theta-dependent activation of the Carma1, Bcl10, and Malt1 (CBM) complex. Antigen-induced phosphorylation of BcI10 has been reported, but its physiological function is unknown. Here we show that the putative downstream kinase IKK beta is required for initial CBM complex formation. Further, upon engagement of IKK beta/Malt1/Bcl10 with Carma1, IKK beta phosphorylates Bcl10 in the C terminus and thereby interferes with Bcl10/Malt1 association and Bcl10-mediated IKK gamma ubiquitination. Mutation of the IKK beta phosphorylation sites on Bcl10 enhances expression of NF-kappa B target genes IL-2 and TNF alpha after activation of primary T cells. Thus, our data provide evidence that IKK beta serves a dual role upstream of its classical substrates, the I kappa B proteins. While being essential for triggering initial CBM complex formation, IKK beta-dependent phosphorylation of Bcl10 exhibits a negative regulatory role in T cell activation.