Signaling pathways involving NF-κB transcription factors have essential roles in inflammation, immunity, cell proliferation, differentiation, and survival. Classical IκB proteins, such as IκBα and IκBβ, bind to NF-κB via ankyrin repeats to sequester NF-κB in the cytoplasm and thus suppress NF-κB activity. Unlike these constitutively expressed classical IκBs, the expression of the atypical IκBs Bcl-3, IκBNS, and IκBζ is induced in immune cells after recognition of antigens, pathogen-associated molecular patterns (PAMPs) or cytokines, upon which they localize to the nucleus and form complexes with transcription factors and regulators on the DNA. Atypical, nuclear IκBs have been proposed to modulate NF-κB activity in a context-dependent manner as they can either inhibit or increase gene expression of a subset of NF-κB target genes. This complexity may be related to the molecular function of atypical IκBs, which bind to different transcription factor complexes and form a bridge to different cofactors or epigenetic modifiers. Recent research has identified novel target genes of atypical IκBs that include chemokines, cytokines, and master regulators of lymphocyte differentiation, underscoring prominent roles in adaptive immune and autoimmune responses. Here, we summarize our current understanding of atypical IκBs in lymphocytes with a focus on their emerging role in autoimmunity.