Infection of cells with adenovirus or transfection of cells with double-stranded RNA (dsRNA) activates transcription of the alpha/beta interferon-stimulated genes (ISGs). Induction of ISG expression by adenovirus appears to be mediated through the same DNA target that is responsive to alpha/beta interferons, the interferon-stimulated response element (ISRE). Transcriptional induction by alpha/beta interferons has been shown previously to be mediated by the activation of a latent cytoplasmic transcription factor, ISGF3, that translocates to the nucleus and binds to the ISRE. However, ISG expression induced by adenovirus or dsRNA appears to be mediated by unique dsRNA-activated factors (DRAFs) that bind to the ISRE. The activation of these preexisting factors by dsRNA does not require new protein synthesis. Two DRAFs, DRAF1 and DRAF2, have been identified in our studies as ISRE-binding complexes in gel mobility shift assays. The ISRE-binding specificity of DRAF1 is similar to that of ISGF3; however, the ISRE-binding specificity of DRAF2 is distinct. Activation of DRAF1 and DRAF2 is independent of interferon action since it occurs in cells that are nonresponsive to interferon and in cells that lack the alpha/beta interferon locus. The activation pathway of DRAF1 and DRAF2 is blocked by the protein kinase inhibitors staurosporine and genistein. This is analogous to the interferon signal transduction pathway and suggests that phosphorylation, possibly tyrosine phosphorylation, is involved in activation of these factors.