Interferon (IFN) regulatory factor 1 (IRF-1) and IRF-2 are structurally similar but functionally distinct transcription factors that bind to the positive regulatory domains I and III (PRDI/III) within the human IFN-beta promoter. To begin structure-function analysis of IRF-1 and IRF-2, the regulatory potential of carboxyl-terminal deletion mutants was analyzed by co-transfection studies in human cells and was correlated with DNA binding capacity. Transcriptional repression by IRF-2 was contained within the first 125 amino-terminal amino acids and correlated directly with IRF-2 DNA binding; deletion to a protein of 100 amino acids resulted in loss of repression and IRF-2 DNA binding. Thus, the carboxyl terminus appears dispensible for trans-repression. Hybrid constructs which fuse the DNA binding domain of IRF-1 and IRF-2 to the trans-activation domain of NF-kappa B p65 were also generated; both IRF-1/p65 and IRF-2/p65 chimeras were strong transcriptional activators. IRF-2-mediated repression was also dominant over trans-activation by these fusion proteins. The trans-activation region of IRF-1 resides in the carboxyl terminus, primarily carboxyl-terminal to amino acid 250. Mutation of three potential casein kinase II phosphorylation sites within the IRF carboxyl terminus failed to identify an essential site that contributes to IRF-1 trans-activation potential.