The C-terminal, partially truncated forms of the NF-κB2/p52 precursor p100, p100ΔCs, manifest constitutive processing and oncogenic ability, although the responsible mechanisms remain unknown. Here, we report that p100ΔCs are specifically processed in association with binding to promoter DNA-containing κB sites. In the nucleus, p100ΔCs bind to the κB promoter DNA and subsequently recruit the proteasome to form a stable proteasome/p100ΔC/DNA complex, which mediates the processing of p100ΔCs. Notably, the processing at the κB promoter is initiated by a proteasome-mediated endoproteolytic cleavage at amino acid D₄₁₅ of p100ΔCs, and the processed p52, but not the precursors themselves, is oncogenic by up-regulating a subset of target genes. Our studies demonstrate a different mechanism of p100 processing and also present evidence showing that the proteasome modulates the action of transcription factors at promoter regions through endoproteolysis.