Interferon-gamma (IFN gamma) and tumor necrosis factor-alpha (TNF alpha) cooperate to induce the expression of many gene products during inflammation, The present report demonstrates that a portion of this cooperativity is mediated by synergism between two distinct transcription factors: signal transducer and activator of transcription 1 (STAT1) and nuclear factor kappa B (NF-kappa B). IFN gamma and TNF alpha synergistically induce expression of mRNAs encoding interferon regulatory factor-1 (IRF-1), intercellular adhesion molecule-1, Mig (monokine induced by gamma-interferon), and RANTES (regulated on activation normal T cell expressed and secreted) in normal but not STAT1-deficient mouse fibroblasts, indicating a requirement for STAT1, Transient transfection assays in fibroblasts using site-directed mutants of a 1.3-kilobase pair sequence of the IRF-1 gene promoter revealed that the synergy was dependent upon two sequence elements; a STAT binding element and a kappa B motif. Artificial constructs containing a single copy of both a STAT binding element and a kappa B motif linked to the herpes virus thymidine kinase promoter were able to mediate synergistic response to IFN gamma and TNF alpha; such response varied with both the relative spacing and the specific sequence of the regions between these two sites, Cooperatively responsive sequence constructs bound both STAT1 alpha and NF-kappa B in nuclear extracts prepared from IFN gamma- and/or TNF alpha-stimulated fibroblasts, although binding of individual factors was not cooperative, Thus, the frequently observed synergy between IFN gamma and TNF alpha in promoting inflammatory response depends in part upon cooperation between STAT1 alpha and NF-kappa B, which is most likely mediated by their independent interaction with one or more components of the basal transcription complex.