IFN-gamma is a potent inducer of class II MHC Ags on different cell types, including the astrocyte. TNF-alpha alone has no effect on class II MHC expression, but enhances IFN-gamma-induced class II expression. IFN-gamma acts by inducing transcription of the class II gene, and TNF-alpha enhances the rate of IFN-gamma-induced transcription. We have previously described two factors, IFN-gamma-enhanced factor X (IFNEX) and TNF-alpha induced complex X (TIC-X), whose expression is induced by IFN-gamma and IFN-gamma/TNF-alpha, respectively, which interacted with the X box of the DRA promoter. In this study, we show that IFNEX and TIC-X bind to the X2 core, with contacts extending into the 3' end of X1 and into the spacer region of the DRA promoter. We also show a functional correlation between binding activity and transcriptional activity of the DRA promoter. These results strongly suggest that both IFNEX and TIC-X play important roles in the regulation of class II MHC gene expression in the astrocyte.