Usually only cells exposed to virus, double-stranded RNA or other inducers synthesize interferon (IFN). Interferon mRNA appears 1-2 h after induction, peaks at 1.5-20 h and decays with a half life of about 30 min. So far, it has not been determined whether induction of interferon is due to transient stabilization of a rapidly turning-over mRNA or to activation of transcription. To clarify this issue we transformed mouse L cells with a hybrid gene in which the 5'-flanking region of the human IFN-alpha 1 gene was followed by the rabbit beta-globin transcription unit. Correctly initiated beta-globin RNA appeared only after viral induction, with the kinetics described for interferon mRNA. Cells transformed with the converse construction, or with the complete rabbit beta-globin gene, constitutively produced correctly initiated transcripts; viral infection decreased the level of transcripts. We conclude that induction acts by activating transcription rather than by reducing turnover, and that the regulatory elements are contained in the 5'-flanking region of the interferon gene.