Bcl-3 is a distinctive member of the IkappaB family of NF-kappaB inhibitors because it can function to coactivate transcription. A potential involvement of Bcl-3 in oncogenesis is highlighted by the fact that it was cloned due to its location at a breakpoint junction in some cases of human B-cell chronic lymphocytic leukemia and that it is highly expressed in human breast tumor tissue. To analyze the effects of Bcl-3 dysregulation in breast epithelial cells, we created stable immortalized human breast epithelial cell lines either expressing Bcl-3 or carrying the corresponding vector control plasmid. Analysis of the Bcl-3-expressing cells suggests that these cells have a shortened G(1) phase of the cell cycle as well as a significant increase in hyperphosphorylation of the retinoblastoma protein. Additionally, the cyclin D1 gene was found to be highly expressed in these cells. Upon further analysis, Bcl-3, acting as a coactivator with NF-kappaB p52 homodimers, was demonstrated to directly activate the cyclin D1 promoter through an NF-kappaB binding site. Therefore, our results demonstrate that dysregulated expression of Bcl-3 potentiates the G(1) transition of the cell cycle by stimulating the transcription of the cyclin D1 gene in human breast epithelial cells.