Most members of the TNF family of proteins exist as transmembrane proteins with relatively long intracellular domains, and a number of them are involved in the ill-defined phenomenon of" reverse signaling". We have identified a putative nuclear localization signal in the cytoplasmic domain of TNF which proved to be functional in two assays. Western analysis identified an approximately 10 kDa peptide corresponding to the transmembrane and cytoplasmic domains of TNF after the proteolytic liberation of the 17 kDa, soluble form of TNF. This 10 kDa peptide was enriched in internal membranes and nuclear fractions of disrupted cells. Immune electron-microscopic studies proved its localization in transport vesicles and the nucleus. The nuclear transport of the intracellular segment of TNF resembles the signaling process through the Notch-type of receptors. Indeed, the presence of the 10 kDa peptide seems to influence the expression of another inflammatory cytokine, interleukin-1 beta. These findings suggest that the transmembrane form of TNF has receptor-like properties and its interaction with the receptors initiates a bidirectional signaling.