Type I (alpha/beta) and type II (gamma) IFN enhance MHC class I gene expression through an IFN-responsive element (IRE) present in the 5' flanking region of the class I-a genes. Comparison of the 5' sequences between classical class I-a genes and T region class I-b genes reveals little homology except for presence of a potential IRE. We have found that cell surface expression of thymus leukemia Ag (TL) was up-regulated by IFN-gamma to a greater extent than H-2K,D in all TL+ T cell lines tested. In contrast, IFN-alpha/beta, which significantly increased H-2K and H-2D Ag expression, had only minor effects on TL expression. Resting peripheral T cells, which were considered to be TL- from previous studies, were found to express TL at a low level as determined by flow cytometry, immunoprecipitation, as well as polymerase chain reaction; the level of expression also could be elevated by IFN-gamma. To examine the control of TL gene transcription and its regulation by IFN-gamma, varying lengths of the T18d 5' flanking region were analyzed in chloramphenicol acetyl transferase assays. By deletion analysis, promoter activity and IFN-gamma responsiveness were localized to an 86-bp fragment that contains the IRE. Both responses were localized further to a 32-bp fragment that contained the IRE at its 3' end. RNase protection assays revealed two major transcription initiation sites, one immediately 5' of the IRE and another approximately 60 bp downstream. Furthermore, polymerase chain reaction analysis of mRNA from resting T cells, thymocytes, and T cell tumor lines confirmed the RNase protection data. Thus, transcription of T18d initiates much further upstream than the classical class I genes, can utilize an unusual promoter element, and can be elevated by IFN-gamma.