Interleukin (IL)-12 is a heterodimeric cytokine that is critical for the development of a T-helper-1 immune response and immunity against intracellular pathogens. The IL-12 p40 gene product, expressed specifically in macrophages and dendritic cells, heterodimerizes with p35 to form bioactive IL-12, and heterodimerizes with p19 to comprise the cytokine IL-23. Regulation of the murine IL-12 p40 promoter is complex. Multiple cis-acting elements have been characterized that are involved in activation by bacterial products. However, molecular mechanisms through which interferon (IFN)-gamma and bacterial products synergistically activate IL-12 p40 gene expression are less clear. In this study, a composite NFAT/ICSBP binding site at -68 to -54 is identified that is functionally important for p40 promoter activation by lipopolysaccharide (LPS) and LPS plus IFN-gamma. DNA binding of NFAT and ICSBP is demonstrated on the endogenous promoter by chromatin immunoprecipitation. NFAT is required for ICSBP binding to this region. Overexpression of NFAT and ICSBP synergistically activates the p40 promoter. A dominant negative NFAT molecule attenuates LPS- and IFN-gamma-activated endogenous IL-12 p40 mRNA expression. A physical association between NFAT and ICSBP in the absence of DNA is detected by co-immunoprecipitation of endogenous proteins. Three NFAT domains are required for ICSBP interaction. Finally, in LPS- and IFN-gamma-activated RAW-264.7 cells, the association between NFAT and ICSBP is abrogated by IL-10 priming.