We have previously shown that interferon gamma (IFN gamma) synergistically increases PDGF-induced DNA synthesis in mesangial cells. To examine the mechanism, we studied its effect on PDGF-induced c-fos gene transcription using a reporter mesangial cell in which firefly luciferase gene is driven by c-fos promoter. IFN gamma significantly enhanced PDGF-induced c-fos transcription, We have shown previously that PDGF-induced c-fos transcription in mesangial cells is mediated by the ternary complex factor Elk-1. Using a GAL-4 DNA binding-domain-Elk-1 transactivation domain fusion protein-based reporter assay we showed that the increased effect of IFN gamma was not mediated by Elk-1 transactivation. Gel mobility shift assay of lysates of mesangial cells treated with a combination of IFN gamma and PDGF using sis-inducible DNA element (SIE) showed increased STAT1 alpha-SIE complex formation as compared to the PDGF alone. To investigate the transcriptional consequences of this observation, stable reporter mesangial cells in which luciferase gene is driven by four copies of SIE was used, IFN gamma and PDGF in combination significantly increased SIE-dependent transcription as compared to PDGF or IFN gamma alone. Using an antibody in the gel mobility shift assay we showed that the PDGF-induced STE-STAT1 alpha complex recruited the transcriptional coactivator CBP. However, the STA1 alpha-SIE complex formed in the presence of IFN gamma and PDGF did not contain CBP. Taken together, our data provide the first evidence that the synergistic effect of IFN gamma on PDGF-induced DNA synthesis may be the result of increased c-fos gene transcription via SIE. This effect occurs in the presence of increased activation of STAT1 alpha without recruitment of the transcriptional coactivator CBP.