EDAR plays a key role in the process of ectodermal differentiation via activation of the NF-kappaB pathway. We present evidence that EDAR also represses Lef-1/beta-catenin-dependent transcription and this ability is defective in EDAR mutants associated with anhidrotic ectodermal dysplasia. While IKK1/IKKalpha and IKK2/IKKbeta are required for EDAR-induced NF-kappaB activation, they are dispensable for its ability to repress Lef-1/beta-catenin-dependent transcription. In contrast, NIK is not involved in EDAR-induced NF-kappaB activation or Lef-1/beta-catenin transcriptional repression. As Lef-1/beta-catenin pathway controls the expression of EDAR ligand, ectodysplasin-A (EDA), our results point to a negative feedback regulation of EDA-EDAR axis. (C) 2004 Elsevier Inc. All rights reserved.