Interferon-α (IFN-α) stimulates the expression of a number of genes in a pathway that begins with binding to specific high-affinity plasma membrane receptors. All IFN-α–stimulated genes cloned thus far are characterized by the presence of a DNA element, termed Interferon-Stimulated Response Element (ISRE), usually in the 5′ upstream region of the genes. The ISRE binds a nuclear factor(s) following IFN-receptor triggered signal transduction and provides a convenient assay for the rapid phase of IFN-α signal transduction. This phase utilizes a phospholipase A2-generated second messenger which modulates ISRE-binding factors. Expression cloning has resulted in the identification of two specific ISRE-binding proteins that are candidates as signal recipients. Further advances in our understanding of the molecular mechanisms of IFN action may come through the use of yeast genetics. The human p68 kinase expressed in yeast has a growth inhibitory phenotype and provides a useful alternative system for analyzing components of the IFN-stimulated pathways.