We have previously identified a novel interferon (IFN)-stimulated cis-acting enhancer element, gamma-IFN-activated transcriptional element (GATE). GATE differs from the known IFN-stimulated elements in its primary sequence. Preliminary analysis has indicated that the GATE-dependent transcriptional response requires the binding of novel transacting factors. A cDNA expression library derived from an IFN-gamma-stimulated murine macrophage cell line was screened with a (32)P-labeled GATE probe to identify the potential GATE-binding factors. A cDNA coding for a novel transcription-activating factor was identified. Based on its discovery, we named it as GATE-binding factor-1 (GBF-1). GBF-1 homologs are present in mouse, human, monkey, and Drosophila. It activates transcription from reporter genes carrying GATE. It possesses a strong transactivating activity but has a weak DNA binding property. GBF-1 is expressed in most tissues with relatively higher steady-state levels in heart, liver, kidney, and brain. Its expression is induced by IFN-gamma treatment. GBF-1 is present in both cytosolic and nuclear compartments. These studies thus identify a novel transactivating factor in IFN signaling pathways.