The first STAT-containing transcription factor to be studied, the alpha-interferon-induced ISGF3, is composed of a Stat1:2 heterodimer and a weak DNA-binding protein, p48, that is a member of a growing family of proteins similar to the so-called interferon regulatory factor (IRF-1). The p48 and Stat1:2 heterodimer do not associate stably in the absence of DNA, but we show that amino acids approximately 150 to 250 of Stat1 and a COOH-terminal portion of p48 exhibit physical interaction, implying contact that stabilizes ISGF3. Moreover, amino acid exchanges within the Stat1 contact region diminish or abolish the functional activity of Stat1. This protein interaction domain may be important in other STAT proteins to recruit partners to multiprotein transcription factors.