Interferons (IFNs) play critical roles in host defense by modulating the expression of various genes via tyrosine phosphorylation of STAT transcription factors. Many cytokines including IFNs induce tyrosine phosphorylation of the STAT3 transcription factor, which regulates acute phase gene expression. Using the yeast two-hybrid interaction trap, in which a tyrosine kinase is introduced into the yeast to allow tyrosine phosphorylation of bait proteins, prothymosin-alpha (ProTalpha) was identified to interact with the amino terminal half of tyrosine-phosphorylated STAT3. ProTalpha is a small, acidic, extremely abundant, and essential protein that may play a role in chromatin remodeling, and has been implicated in regulating the growth and survival of mammalian cells. Besides the interaction of tyrosine-phosphorylated STAT3 with ProTalpha in yeast cells, IFN induced the interaction of ProTalpha with STAT3 in mammalian cells, and this interaction was dependent on the tyrosine phosphorylation of STAT3. Moreover, IFNalpha induces the translocation of STAT3 and ProTalpha from the cytoplasm to the nucleus where these proteins colocalize. Since ProTalpha has an extremely strong nuclear localization and STAT proteins apparently lack any nuclear localization signals, the association of STAT3 with ProTalpha may provide a mechanism to result in STAT localization in the nucleus.