The transcription factor AP-1 contributes significantly to the regulation of interleukin-2 gene transcription during T-cell activation and may play a role in thymocyte development. To study the regulation of AP-1 transcriptional activity in primary T-cells, reporter transgenic mice were generated that express luciferase gene under the control of AP-1 binding sites. Here, we demonstrate that while protein kinase C activation is sufficient to induce DNA-binding activity, an additional intracellular calcium increase is required to induce transcriptional activity of AP-1 in primary mouse T-cells. Furthermore, transcriptional, but not DNA-binding, activity of AP-1 is cyclosporin sensitive and requires tyrosine phosphorylation. This dissociation between DNA-binding and transcriptional activity is likely due, at least partially, to post-translational modifications of the AP-1 complex required for transcriptional activity. Moreover, in addition to these two signals delivered by ligand binding to the T-cell receptor (TcR) AP-1 transcriptional activity absolutely requires the presence of a co-stimulatory signal that can be mediated by the interaction of CD28 with its ligands B7-1 and B7-2. Thus, TcR-mediated and co-stimulatory signals required for T-cell activation appear to be integrated, in part, at the level of the regulation of transcriptional activity of AP-1.