A novel interferon (IFN), called IFN-tau (IFN-tau), has recently been discovered and has been shown to be a pregnancy recognition hormone. Unlike known IFNs, however, IFN-tau exhibits high antiviral and antiproliferative activity without cytotoxicity. The structural basis for IFN-tau function has been examined using six overlapping synthetic peptides corresponding to the entire ovine (Ov) IFN-tau sequence. Four peptides representing amino acids 1-37, 62-92, 119-150, and 139-172 inhibited OvIFN-tau antiviral activity in a dose-dependent manner. Polyclonal antipeptide antisera directed against the same four peptides blocked OvIFN-tau binding and antiviral activity, confirming the specificity of the peptide competitions. Because IFN-tau and IFN-alpha both interact with the type I IFN receptor, peptide inhibition of bovine and human IFN alpha activity was also determined. Of importance, only three peptides, OvIFN-tau (62-92), (119-150), and (139-172) inhibited IFN-alpha antiviral activity. The amino-terminal IFN-tau peptide, OvIFN-tau(1-37), was not inhibitory. These data suggest that the internal and carboxy-terminal reactive domains of IFN-tau may interact with a common type I IFN site on the receptor, while the amino terminus interacts with a site that elicits activity unique to OvIFN-tau. Finally, the antiproliferative activity of OvIFN-tau was localized primarily to the broad carboxy-terminal region, with OvIFN-tau(119-150) being the most effective inhibitor of OvIFN-tau-induced reduction of cell proliferation. Thus, multiple domains of IFN-tau have functional significance.(ABSTRACT TRUNCATED AT 250 WORDS)