Interferons (IFN) stimulate the expression of a number of genes following interaction with specific high-affinity plasma membrane receptors. The products of these genes either singly or coordinately mediate the antiviral, growth inhibitory or immunoregulatory activities attributed to IFN. While the gene products in some cases have been well characterized, other IFN-regulated genes encode proteins whose functions have yet to be elucidated. A feature common to all IFN-stimulated genes characterized thus far is the presence of a DNA element which constitutes an IFN-responsive enhancer, usually present in the 5' upstream region of the genes. This element, termed interferon-stimulated response element (ISRE) binds a nuclear factor(s) translocated from the cytoplasm to the nucleus following IFN-receptor-triggered signal transduction. The binding of these factors to the ISRE represents the initiating event in stimulating RNA-polymerase-II-mediated transcription from IFN-responsive genes. Depending on the nature of the cells responding to IFN and the genes involved, induced transcription may be prolonged or rapidly terminated. The rapid termination of transcription is dependent in some cases on IFN-induced protein synthesis and also involves factor binding to the ISRE. Recent progress in detailing these events will be discussed including IFN-receptor interactions, signal-transduction pathways, comparing and contrasting IFN-regulated genes and elucidation of IFN-regulated factors.