Interferon (IFN) regulatory factors (IRFs) are a family of transcription factors among which are IRF-1, IRF-2, and IFN consensus sequence binding protein (ICSBP). These factors share sequence homology in the N-terminal DNA-binding domain. IRF-1 and IRF-2 are further related and have additional homologous sequences within their C-termini. Whereas IRF-2 and ICSBP are identified as transcriptional repressors, IRF-1 is an activator. In the present work, the identification of functional domains in murine IRF-1 with regard to DNA-binding, nuclear translocation, heterodimerization with ICSBP and transcriptional activation are demonstrated. The minimal DNA-binding domain requires the N-terminal 124 amino acids plus an arbitrary C-terminal extension. By using mutants of IRF-1 fusion proteins with green fluorescent protein and monitoring their distribution in living cells, a nuclear location signal (NLS) was identified and found to be sufficient for nuclear translocation. Heterodimerization was confirmed by a two-hybrid system adapted to mammalian cells. The heterodimerization domain in IRF-1 was defined by studies in vitro and was shown to be homologous with a sequence in IRF-2, suggesting that IRF-2 also heterodimerizes with ICSBP through this sequence. An acidic domain in IRF-1 was found to be required and to be sufficient for transactivation. Epitope mapping of IRF-1 showed that regions within the NLS, the heterodimerization domain and the transcriptional activation domain are exposed for possible contacts with interacting proteins.