Pituitary function has been shown to be regulated by an increasing number of intrapituitary factors, including cytokines. Here we show that the important cytokine TNF-alpha activates prolactin gene transcription in pituitary GH3 cells stably expressing luciferase under control of 5 kb of the human prolactin promoter. Similar regulation of the endogenous rat prolactin gene by TNF-alpha in GH3 cells was confirmed using real-time PCR. Luminescence microscopy revealed heterogeneous dynamic response patterns of promoter activity in individual cells. In GH3 cells treated with TNF-alpha, Western blot analysis showed rapid inhibitory protein kappa B (I kappa B alpha) degradation and phosphorylation of p65. Confocal microscopy of cells expressing fluorescence-labeled p65 and I kappa B alpha fusion proteins showed transient cytoplasmic-nuclear translocation and subsequent oscillations in p65 localization and confirmed I kappa B alpha degradation. This was associated with increased nuclear factor kappa B (NF-kappa B)-mediated transcription from an NF-kappa B-responsive luciferase reporter construct. Disruption of NF-kappa B signaling by expression of dominant-negative variants of I kappa B kinases or truncated I kappa B alpha abolished TNF-alpha activation of the prolactin promoter, suggesting that this effect was mediated by NF-kappa B. TNF-alpha signaling was found to interact with other endocrine signals to regulate prolactin gene expression and is likely to be a major paracrine modulator of lactotroph function.