Enhancement of RNA polymerase II transcription by the viral transactivator VP16 requires the TFIID complex, which consists of the TATA-binding protein (TBP) and TBP-associated factors (TAFs). Here we report the molecular cloning, expression, and biochemical characterization of Drosophila TAF(II)40 (dTAF(II)40), a subunit of TFIID. In vitro protein-protein interaction assays revealed direct binding between dTAF(II)40 and a 39 amino acid VP16 activation domain. In addition, affinity chromatography indicated a direct binding of the basal factor TFIIB to immobilized dTAF(II)40. Since VP16 also binds TFIIB, our results suggest a ternary interaction among an activator, a coactivator, and a basal transcription factor. Antibodies directed against dTAF(II)40 inhibited activation by GAL4-VP16 without affecting basal transcription. These results, taken together with previous studies of Sp1 and dTAF(II)110, establish that different activators interact with distinct TAFs in the TFIID complex and that TAFs can contact both activators and basal factors.