Cyclosporine (CsA) inhibits cytokine transcription by preventing the activation of key promoter sites, in particular the binding of nuclear factor of activated T cells (NFAT) to the IL-2 NFAT site and the "P" site in IL-4. To identify potential NFAT-like sites in the IFN-gamma promoter, we sought areas of homology with the known sites in other promoters. In the promoter region of the mouse and human IFN-gamma gene, we identified two repeats of a consensus sequence ATTTCCnnT, designated P1 and P2 because of their homology to the calcium-inducible and CsA-sensitive "P" sequences in the IL-4 promoter. In electrophoretic mobility shift assay (EMSA), a probe containing the second P sequence "P2" in the human IFN-gamma gene bound nuclear proteins from stimulated, but not unstimulated, humans T cells. The cytosol of unstimulated cells contained similar binding activity that decreased after stimulation, indicating that this binding activity translocated to the nucleus after stimulation. CsA inhibited nuclear translocation. Competition studies demonstrated that oligomers containing the sequences P1 and P2 in IFN-gamma gene, the NFAT site in the IL-2 gene, and the IL-4 P site competed with the P2 probe for protein binding, whereas an oligomer containing mutations in the P2 site did not. Addition of anti-NFAT antiserum altered protein binding to P2, indicating that the proteins were either identical or related to NFAT. Stimulation of T cells transfected with constructs containing three copies of the P2 sequence enhanced CAT activity in response to ionomycin, and this effect was blocked by CsA. These results suggest that the P2 sequence, and probably the P1 sequence, in the IFN-gamma promoter are NFAT binding sites and contribute to the calcium inducibility and CsA sensitivity of IFN-gamma production.