Interferon regulatory factor-1 (IRF-1), a transcriptional activator, and IRF-2, its antagonistic repressor, have been identified as regulators of type I interferon and interferon-inducible genes. The IRF-1 gene is itself interferon-inducible and hence may be one of the target genes critical for interferon action. When the IRF-2 gene was overexpressed in NIH 3T3 cells, the cells became transformed and displayed enhanced tumorigenicity in nude mice. This transformed phenotype was reversed by concomitant overexpression of the IRF-1 gene. Thus, restrained cell growth depends on a balance between these two mutually antagonistic transcription factors.