The functional subunits of the human Type I interferon (IFN) receptor complex have not been defined. Using site-specific recombination in a yeast artificial chromosome (YAC), we have produced a deletion within the human IFN-alpha receptor (Hu-IFN-alpha R1) gene which eliminates exon II of the gene. This deletion effectively eliminates the MHC Class I antigen induction and antiviral activity previously reported for this fully functional parental YAC clone (Soh, J., Mariano, T. M., Lim, J.-K., Izotova, L., Mirochnitchenko, O., Schwartz, B., Langer, J., and Pestka, S. (1994c) J. Biol. Chem. 269, 18102-18110). We have successfully reconstituted this activity by expression of the cDNA encoding the Hu-IFN-alpha R1 component (Uzé, G., Lutfalla, G., and Gresser, I. (1990) Cell 60, 225-234) in cells containing the YAC with this deletion. The Hu-IFN-alpha R1 subunit thus plays a critical role in the functional human Type I IFN receptor complex, whose components are encoded on this YAC. In addition, as binding of ligands is retained in the cells containing the YAC with the deletion, it is clear a second subunit encoded on the YAC is responsible for ligand binding activity. This system will now allow the identification of additional subunits involved in the response to the Type I IFNs and the functional significance of each.