Alpha interferon stimulates transcription by converting the positive transcriptional regulator ISGF3 from a latent to an active form. This receptor-mediated event occurs in the cytoplasm, with subsequent translocation of the activated factor to the nucleus. ISGF3 has two components, termed ISGF3 alpha and ISGF3 gamma. ISGF3 gamma serves as the DNA recognition subunit, while ISGF3 alpha, which appears to consist of three polypeptides, is a target for alpha interferon signaling and serves as a regulatory component whose activation is required to form ISGF3. ISGF3 gamma DNA-binding activity was identified as a 48-kDa polypeptide, and partial amino acid sequence has allowed isolation of cDNA clones. ISGF3 gamma translated in vitro from recombinant clones bound DNA with a specificity indistinguishable from that of ISGF3 gamma purified from HeLa cells. Sequencing of ISGF3 gamma cDNA clones revealed significant similarity to the interferon regulatory factor (IRF) family of DNA binding proteins in the amino-terminal 117 residues of ISGF3 gamma. The other IRF family proteins bind DNA with a specificity related to but distinct from that of ISGF3 gamma. We note sequence similarities between the related regions of IRF family proteins and the imperfect tryptophan repeats which constitute the DNA-binding domain of the c-myb oncoprotein. These sequence similarities suggest that ISGF3 gamma and IRF proteins and the c-myb oncoprotein use a common structural motif for DNA recognition. Recombinant ISGF3 gamma, like the natural protein, interacted with HeLa cell ISGF3 alpha to form the mature ISGF3 DNA-binding complex. We suggest that other IRF family members may participate in signaling pathways by interacting with as yet unidentified regulatory subunits analogous to ISGF3 alpha.