Interferon-stimulated gene factor 3 (ISGF3), the primary transcription factor induced by interferon alpha, is a complex of four (113, 91, 84, and 48 kd) proteins. This paper reports that the 113, 91, and 84 kd (ISGF3 alpha) proteins of ISGF3 contain conserved SH2 and SH3 domains. A specific interferon alpha-induced cytoplasmic protein tyrosine kinase(s) can form a transient complex with ISGF3 alpha proteins. These ISGF3 alpha proteins can be immunoprecipitated by anti-phosphotyrosine antibodies only after interferon alpha treatment. Phosphoamino acid analyses of 32P-labeled ISGF3 alpha proteins confirm that ISGF3 alpha proteins are directly tyrosine phosphorylated both in vitro and in vivo in response to interferon alpha, and this tyrosine phosphorylation can be inhibited by staurosporine and genistein. Phosphatase treatment of these ISGF3 alpha proteins results in inhibition of ISGF3 complex formation in vitro. These observations indicate that interferon alpha-induced direct tyrosine phosphorylation of ISGF3 alpha proteins is necessary for activation of the transcription factor ISGF3.