Interferon (IFN) induces transcription of major histocompatibility class I genes by way of the conserved cis-acting regulatory element, termed the IFN consensus sequence (ICS). Binding of nuclear factors to the ICS was studied in gel mobility shift assays with the 5' upstream region of the murine H-2Ld gene. We found that the ICS binds a constitutive nuclear factor present in lymphocytes and fibroblasts regardless of IFN treatment. Within 1 hr after IFN treatment, new ICS binding activity was induced, which consisted of at least two binding activities distinguished by their requirement for de novo protein synthesis. Methylation interference and competition experiments showed that both constitutive and induced factors bind to the same approximately equal to 10-base-pair binding site within the ICS. Site-directed mutagenesis of H-2Ld-chloramphenicol acetyltransferase fusion genes showed that mutations in the binding site, but not in other regions of the ICS, abolish transcriptional activation of class I genes by IFN, providing evidence that specific binding of nuclear factors to the ICS is an essential requirement for transcriptional induction. Finally, we show that IFN-inducible genes of various species share a sequence motif that is capable of competing for the nuclear factors identified here. We propose that specific protein binding to the conserved motif represents a basic mechanism of IFN-mediated transcriptional induction of a number of genes.