Low levels of the transcription factor ISGF3alpha were detected in the cytoplasm and nucleus of untreated Daudi cells, which increased markedly following interferon (IFN) treatment. In contrast no ISGF3alpha was detected in an IFN-resistant clone of Daudi cells, DIF8, and only low levels were detected in these cells after IFN-alpha treatment. High levels of ISGF3 were produced in vitro, however, by the addition of ISGF3alpha to extracts of IFN-treated DIF8 cells, indicating that IFN is unable to produce substantial amounts of functional ISGF3alpha in DIF8 cells. A second clone of IFN-resistant Daudi cells, DIF3, also exhibited defective ISGF3alpha production, which was restored to normal in the subclone DIF3REV5 that had reverted to high IFN sensitivity. Thus, the antiproliferative effect of IFN on Daudi cells and derived clones is closely related to the level of ISGF3 present in the nucleus of these cells. IFN-alpha, however, also enhances the content of ISGF3gamma in IFN-resistant cells as well as certain proteins of unknown function, raising the possibility that a second pathway of IFN-alpha signal transduction, distinct from the ISGF3 pathway, remains functional in both DIF8 and DIF3 cells.