Bacterial lipopolysaccharide (LPS), an endotoxin from Gram-negative bacteria, exerts a variety of biological responses. The Na⁺/I^- Symporter (NIS)-mediated iodide uptake is the main rate-limiting step in thyroid hormonogenesis. We have reported the ability of LPS to stimulate the TSH-induced NIS expression. The aim of this work was to analyze the molecular mechanism involved in the LPS action in the thyroid cell line FRTL-5. LPS increased the TSH-induced NIS mRNA expression and transcription of the transfected rat NIS promoter. Testing internal deletions of the promoter, we defined the NIS upstream enhancer (NUE) as responsible for the LPS stimulatory effect. NUE contains two Pax8 binding sites. Site-directed mutagenesis showed a critical role of Pax8 C site in LPS action. Bioinformatics analysis over NUE region looking for conserved sites for LPS effectors, showed a novel conserved site for the transcription factor NFkB (region kB). Functional blockage of NFkB signaling by pharmacological agents antagonized LPS effect. Site directed mutagenesis of the kB site abrogates LPS stimulation. Co-expression of Pax8 and the main efector NFkB-subunit p65 in Cos-7 cells synergistically activates NIS promoter transcription but not subunit p50. Silencing of endogenous p65 levels by siRNA confirmed its participation as efector of LPS action on NIS expression. Furthermore, ChIP experiments confirmed that NIS is a novel target gene for p65 transactivation in response to LPS. Our results thus reveal a new mechanism of p65 in regulating thyroid cell differentiation.