Interferon consensus sequence binding protein (ICSBP) is a member of the interferon regulatory factor (IRF) family of proteins that include IRF-1, IRF-2, and ISGF3γ which share sequence similarity at the putative DNA binding domain (DBD). ICSBP is expressed exclusively in cells of the immune system and acts as a repressor of interferon consensus sequence (ICS) containing promoters that can be alleviated by interferons. In this communication, we have searched for functional domains of ICSBP by dissecting the DBD from the repression activity. The putative DBD of ICSBP (amino acids 1-121) when fused in frame to the transcriptional activation domain of the herpes simplex VP16 (ICSBP-VP16) is a very strong activator of ICS-containing promoters. In addition, ICSBP-VP16 fusion construct transfected into adenovirus (Ad) 12 transformed cells enabled cell surface expression of major histocompatibility complex class I antigens as did treatment with interferon. On the other hand, the DBD of the yeast transcriptional activator GAL4 was fused in frame to a truncated ICSBP in which the DBD was impaired resulting in a chimeric construct GAL4-ICSBP. This construct is capable of repressing promoters containing GAL4 binding sites. Thus, ICSBP contains at least two independent domains: a DBD and a transcriptional repressor domain. Furthermore, we have tested possible interactions between ICSBP and IRFs. The chimeric construct GAL4-ICSBP inhibited the stimulated effect of IRF-1 on a reporter gene, implying for a possible interaction between IRF-1 and ICSBP. Electromobility shift assays, demonstrated that ICSBP can associate with IRF- 2 or IRF-1 in vitro as well as in vivo. Thus, ICSBP contains a third functional domain that enables the association with IRFs. These associations are probably important for the fine balance between positive and negative regulators involved in the interferon-mediated signal transduction pathways in cells of the immune system.