Nuclear factor-kappa B (NF kappa B) and peroxisome proliferator activated receptor-gamma (PPAR gamma) are both transcription factors that perform distinct but overlapping roles in cellular regulation. Here we report that PPAR gamma acts as an E3 ubiquitin ligase, physically interacting with p65 to induce its ubiquitination and degradation. The ligand-binding domain of PPARg interacts with the Rel Homology Domain region of NF kappa B/p65 to undergo robust ubiquitination and degradation that was independent of PPAR gamma transcriptional activity. Moreover, the ligand-binding domain of PPAR gamma delivered Lys48-linked polyubiquitin, resulting in the ubiquitination and degradation of p65. Lys28 was found to be critically important for PPAR gamma-mediated ubiquitination and degradation of p65, as it terminated both NF kappa B/p65-mediated pro-inflammatory responses and xenograft tumours. These findings demonstrate that PPAR gamma E3 ubiquitin ligase activity induces Lys48-linked ubiquitination and degradation of p65, and that this function is critical to terminate NF kappa B signalling pathway-elicited inflammation and cancer.