Tumor cell lines with a defective retinoblastoma gene are unable to transcribe the HLA class II genes in response to IFN-gamma treatment, and reconstitution of functional Rb rescues IFN-gamma-induced class II gene expression. However, the molecular mechanism of Rb rescue of the class II genes is unknown. We have examined the effect of Rb expression on the activation of the promoter for HLA-DRA, the prototype class II gene. Oct-1, a POU domain transcription factor, was identified as a repressor of HLA-DRA promoter activity in the Rb-defective cells. Rb expression led to phosphorylation of Oct-1, thus relieving its repressive effect. Oct-1 has also been shown to repress interleukin 8 promoter activity. Consistent with reduced levels of Oct-1 DNA binding activity in the Rb-transformed cell lines, interleukin 8 expression is higher in these cell lines.