Gamma interferon (IFN-gamma) activates the formation of a DNA-binding protein complex (FcRF gamma) that recognizes the gamma response region (GRR) of the promoter for the human high-affinity Fc gamma receptor. In a membrane-enriched fraction prepared from human peripheral blood monocytes, IFN-gamma activation of FcRF gamma occurred within 1 min and was ATP dependent. Activation of FcRF gamma required a tyrosine kinase activity, and recognition of the GRR sequence by FcRF gamma could be abrogated by treatment with a tyrosine-specific protein phosphatase. Treatment of cells with vanadate alone resulted in the formation of FcRF gamma without the need for IFN-gamma. UV cross-linking and antibody competition experiments demonstrated that the FcRF gamma complex was composed of at least two components: the 91-kDa protein of the IFN-alpha-induced transcription complex ISGF3 and a 43-kDa component that bound directly to the GRR. Therefore, specificity for IFN-induced transcriptional activation of early response genes requires at least two events: (i) ligand-induced activation of membrane-associated protein by tyrosine phosphorylation and (ii) formation of a complex composed of an activated membrane protein(s) and a sequence-specific DNA-binding component.