In plants, expression of a disease-resistance character following perception of a pathogen involves massive deployment of transcription-dependent defenses. Thus, if rapid and effective defense responses have to be achieved, it is crucial that the pathogenic signal is transduced and amplified through pre-existing signaling pathways. Reversible phosphorylation of specific transcription factors, by a concerted action of protein kinases and phosphatases, may represent a mechanism for rapid and flexible regulation of selective gene expression by environmental stimuli. Here we identified a novel DNA-binding protein from tobacco plants, designated DBP1, with protein phosphatase activity, which binds in a sequence-specific manner to a cis- acting element of a defense-related gene and participates in its transcriptional regulation. This finding helps delineate a terminal event in a signaling pathway for the selective activation of early transcription-dependent defense responses in plants, and suggests that stimulus-dependent reversible phosphorylation of regulatory proteins may occur directly in a transcription protein-DNA complex.