As targets for the immunosuppressive drugs cyclosporin A and FK506, transcription factors of the NFAT (nuclear factor of activated T cells) family have been the focus of much attention. NFAT proteins, which are expressed in most immune-system cells, play a pivotal role in the transcription of cytokine genes and other genes critical for the immune response. The activity of NFAT proteins is tightly regulated by the calcium/calmodulin-dependent phosphatase calcineurin, a primary target for inhibition by cyclosporin A and FK506. Calcineurin controls the translocation of NFAT proteins from the cytoplasm to the nucleus of activated cells by interacting with an N-terminal regulatory domain conserved in the NFAT family. The DNA-binding domains of NFAT proteins resemble those of Rel-family proteins, and Rel and NFAT proteins show some overlap in their ability to bind to certain regulatory elements in cytokine genes. NFAT is also notable for its ability to bind cooperatively with transcription factors of the AP-1 (Fos/Jun) family to composite NFAT:AP-1 sites, found in the regulatory regions of many genes that are inducibly transcribed by immune-system cells. This review discusses recent data on the diversity of the NFAT family of transcription factors, the regulation of NFAT proteins within cells, and the cooperation of NFAT proteins with other transcription factors to regulate the expression of inducible genes.