Tabby and downless mutant mice have identical phenotypes characterized by deficient development of several ectodermally derived organs such as teeth, hair, and sweat glands. Edar, encoded by the mouse downless gene and defective in human dominant and recessive forms of autosomal hypohidrotic ectodermal dysplasia (EDA) syndrome, is a new member of the tumor necrosis factor (TNF) receptor superfamily. The ligand of Edar is ectodysplasin, a TNF-like molecule mutated in the X-linked form of EDA and in the spontaneous mouse mutant Tabby. We have analyzed the response of Edar signaling in transfected cells and show that it activates nuclear factor-kappaB (NF-kappaB) in a dose-dependent manner. When Edar was expressed at low levels, the NF-kappaB response was enhanced by coexpression of ectodysplasin. The activation of NF-kappaB was greatly reduced in cells expressing mutant forms of Edar associated with the downless phenotype. Overexpression of Edar did not activate SAPK/JNK nor p38 kinase. Even though Edar harbors a death domain its overexpression did not induce apoptosis in any of the four cell lines analyzed, nor was there any difference in apoptosis in developing teeth of wild-type and Tabby mice. Additionally, we show that the subcellular localization of dominant negative alleles of downless is dramatically different from that of recessive or wild-type alleles. This together with differences in NF-kappaB responses suggests an explanation for the different mode of inheritance of the different downless alleles.