Cytokines mediate much of the cell to cell communication that is necessary for control of immune-mediated inflammation. In many circumstances, this is achieved through interplay between distinct classes of cytokines that promote either cooperative or antagonistic effects (1-3). The T helper cell type I (Th1) 1 -derived cytokine IFN␥ promotes the development of cell-mediated immunity (3-6) and often functions cooperatively with TNF to regulate pro-inflammatory gene expression in a variety of cell types (7,8). In contrast, the Th2-derived cytokine IL-4 promotes humoral immunity and differentiation of Th2 cells (1,3,5,6,9) in part via antagonistic effects on Th1-cytokine-driven gene expression (3, 5, 10 -12).Intracellular signaling events linked with response to cytokine-receptor interaction have been extensively studied. Signal transducers and activators of transcription (STATs) are latent cytoplasmic transcription factors that are phosphorylated at a single tyrosine residue via members of the Jak kinase family following ligand-receptor interaction, assemble in dimeric form, translocate to the nucleus, and bind to specific DNA sequence motifs (13-15). Prototypically, IFN␥ activates STAT1 homodimers that bind to IFN␥ activation sequences (GAS) composed of two inverted repeats separated by three intervening nucleotides (N3 site, TTCnnnGAA) and promote transcription of IFN␥-responsive genes (14, 16). Likewise, IL-4 leads to activation of STAT6 (17-19), which can stimulate gene transcription by binding to a sequence that resembles the GAS motif but instead contains four intervening nucleotides between the inverted repeat (N4 site, TTCnnnnGAA) (20 -24). Interestingly, STAT6 can also bind N3 GAS elements but with little or no transactivation potential (23,25,26).Although the negative regulatory role of IL-4 in immune inflammatory reactions has been well delineated (3, 5, 10 -12, 27-34), the molecular mechanisms involved remain incompletely understood. We have previously demonstrated that IL-4 does not inhibit tyrosine phosphorylation, nuclear translocation, nor DNA binding activity of STAT1 and that STAT6 is required for inhibition of IFN␥-inducible gene transcription in mouse macrophages (26,35). Because the cis-elements required for IFN␥-induced transcription (ISRE, GAS, and ␥RE) are also sufficient for IL-4-mediated inhibition and because STAT6 homodimers are capable of binding to these sites without transactivating function (26,35,36), it has been suggested that inhibition might involve competition between transactivating STAT1 and non-transactivating STAT6 for the N3 sites found in the promoters of sensitive genes (26). An analogous mechanism has been reported for inhibition of E-selectin gene transcription by IL-4, where STAT6 competes with NF-B for an overlapping binding site (37). A second hypothesis is that IL-4-activated STAT6 competes with STAT1 for limiting quantities of transcriptional coactivators such as the CREB-binding protein (CBP) (35). Previous studies have shown that repression of AP-1-dependent tr...