Interferon-gamma (IFN-gamma) induces the transcription of the gene encoding a guanylate binding protein by activating a latent cytoplasmic factor, GAF (gamma-activated factor). GAF is translocated to the nucleus and binds a DNA element, the gamma-activated site. Through cross-linking and the use of specific antibodies GAF was found to be a 91-kilodalton DNA binding protein that was previously identified as one of four proteins in interferon-stimulated gene factor-3 (ISGF-3), a transcription complex activated by IFN-alpha. The IFN-gamma-dependent activation of the 91-kilodalton DNA binding protein required cytoplasmic phosphorylation of the protein on tyrosine. The 113-kilodalton ISGF-3 protein that is phosphorylated in response to IFN-alpha was not phosphorylated nor translocated to the nucleus in response to IFN-gamma. Thus the two different ligands result in tyrosine phosphorylation of different combinations of latent cytoplasmic transcription factors that then act at different DNA binding sites.