We report here the isolation and characterization of two proteins, NFAR-1 and -2, which were isolated through their ability to interact with the dsRNA-dependent protein kinase, PKR. The NFAR proteins, of 90 and 110 kDa, are derived from a single gene through alternative splicing and are evolutionarily conserved nuclear phosphoproteins that interact with double-stranded RNA. Both NFAR-1 and -2 are phosphorylated by PKR, reciprocally co-immunoprecipitate with PKR, and colocalize with the kinase in a diffuse nuclear pattern within the cell. Transfection studies indicate that the NFARs regulate gene expression at the level of transcription, probably during the processing of pre-mRNAs, an activity that was increased in fibroblasts lacking PKR. Subsequent functional analyses indicated that amino acids important for NFAR's activity were localized to the C terminus of the protein, a region that was found to specifically interact with FUS and SMN, proteins also known as regulators of RNA processing. Accordingly, both NFARs were found to associate with both pre-mRNAs and spliced mRNAs in post-transcriptional studies, similar to the known splicing factor ASF/SF-2. Collectively, our data indicate that the NFARs may facilitate double-stranded RNA-regulated gene expression at the level of post-transcription and possibly contribute to host defense-related mechanisms in the cell.