The mechanism by which interleukin-4 (IL-4) regulates the expression of particular genes is unknown. We have determined that IL-4 induces a DNA binding factor (termed STF-IL-4) which has a strong affinity for an IFN-gamma activation site (GAS). Interestingly, STF-IL-4 also binds to the IL-4 responsive promoter for the Ig heavy chain germline epsilon transcript. The IL-4 dependent activation of STF-IL-4 is rapid, does not require protein synthesis and results in the sequential appearance of binding activity first in the cytoplasm and then later in the nucleus. Activation of STF-IL-4 is sensitive to tyrosine kinase inhibitors and the active factor is tyrosine phosphorylated. This pattern of activation is similar to the activation of interferon-induced transcription factors. STF-IL-4 appears to be a new member of a growing family of cytokine-induced transcriptional regulators.