Lymphotoxin-beta receptor (LT beta R), a member of the tumor necrosis factor receptor superfamily, is essential for the development and organization of secondary lymphoid tissue, Wild type and mutant LT beta R containing successive truncations of the cytoplasmic domain were investigated by retrovirus-mediated gene transfer into HT29.14s and in 293T cells by transfection, Wild type receptors accumulated in perinuclear compartments and enhanced responsiveness to ligand-induced cell death and Ligand-independent activation of NF kappa B p50 dimers. Coimmunoprecipitation and confocal microscopy mapped the TRAF3 binding site to amino acids PEEGDPG at position 389, However, LT beta R truncated at position Pro(379) acted as a dominant positive mutant that down-modulated surface expression and recruited TRAF3 to endogenous LT beta R. This mutant exhibited ligand-independent cell death and activated NF-kappa B p50 dimers. By contrast, truncation at Gly(359) created a dominant-negative mutant that inhibited ligand-induced cell death and activation of NF-kappa B p50/p65 heterodimers. This mutant also blocked accumulation of wild type receptor into perinuclear compartments, suggesting subcellular localization may be crucial for signal transduction. A cryptic TRAF-independent NF-kappa B activating region was identified. These mutants define discrete subregions of a novel proline-rich domain that is required for subcellular localization and signal transduction by the LT beta R.