The v-rel oncogene encoded by reticuloendotheliosis virus is the acutely transforming member of the Rel/NF-kappaB family of transcription factors. v-Rel is a truncated and mutated form of c-Rel and transforms cells by inducing the aberrant expression of genes regulated by Rel/NF-kappaB proteins. The expression of ch-IAP1, a member of the inhibitor-of-apoptosis family, is highly elevated in cells expressing v-Rel and contributes to the immortalization of cells transformed by this oncoprotein. In this study we demonstrate that the elevated expression of ch-IAP1 in v-Rel-expressing cells is due to an increased rate of transcription. The ch-IAP1 promoter was isolated, and four Rel/NF-kappaB binding sites were identified upstream of the transcription start site. Two kappaB sites proximal to the transcription start site were required for v-Rel to activate the ch-IAP1 promoter. While c-Rel also utilized these sites, a third more-distal kappaB site was required for its full activation of the ch-IAP1 promoter. Differences in the transactivation domains of v-Rel and c-Rel are responsible for their different abilities to utilize these sites and account for their differential activation of the ch-IAP1 promoter. Although c-Rel was a more potent activator of the ch-IAP1 promoter than v-Rel in transient reporter assays, cells stably overexpressing c-Rel failed to maintain high levels of ch-IAP1 expression. The reduction of ch-IAP1 expression in these cells correlated with the efficient regulation of c-Rel by IkappaBalpha. The ability of v-Rel to escape IkappaBalpha regulation allows for the gradual and sustained elevation of ch-IAP1 expression directly contributing to the transforming properties of v-Rel.