Interferon gamma (IFN-gamma) plays an important physiological role during inflammation by down-regulating collagen gene expression and activating major histocompatibility II (MHC-II) complex. The activation of MHC-II by IFN-gamma requires activation of a trimeric DNA binding transcriptional complex, RFX5 complex, containing RFXB (also called RFXANK or Tvl-1), RFXAP, as well as RFX5 protein. Previously, we demonstrated that RFX5 binds to the collagen transcription start site and represses collagen gene expression (Sengupta, P. K., Fargo, J., Smith, B. D. (2002) J. Biol. Chem. 277, 24926-24937). In this report, we have examined the role of RFXB and RFXAP proteins within the RFX5 complex to regulate collagen gene expression. The data show that all three RFX5 complex proteins are required for maximum repression. Expression of proteins with mutations known to be important for RFX5 complex formation does not repress collagen promoter activity. Two mutated forms of RFX5 act as dominant negative proteins activating collagen expression and reversing IFN-gamma down-regulation of collagen expression in human lung fibroblasts. IFN-gamma increases expression and nuclear translocation of RFX5. RFXB has a naturally occurring splice variant isoform (RFX SV). Interferon increases expression of the long form of RFXB and decreases expression of RFX SV with the same kinetics as collagen gene expression. Overexpression of the splice variant form reverses the IFN-gamma induced collagen repression in human lung fibroblasts. Finally, all three RFX5 complex proteins increase at the collagen transcription start site with IFN-gamma treatment using chromatin immunoprecipitation analysis. Thus, these studies suggest an important role for RFX5 complex in collagen repression.