STAT proteins are members of an evolutionary highly conserved protein family. They consist of a modular domain structure with six well-characterized functional domains. The linker domain, which connects the amino-terminal DNA-binding domain with the carboxy-terminal SH2-domain, is known to be engaged in DNA binding and transcriptional activation. However, the molecular mechanisms regulating transcriptional modulation by the linker domain are largely unknown. To gain a deeper insight into the role of this domain in DNA-binding and transcriptional activation, point mutants in the linker domain of STAT1 were generated and functionally characterized. The substitution of a conserved glutamate residue in position 500 resulted in enhanced transcriptional activation of IFN -sensitive genes, whereas tyrosine phosphorylation and nuclear accumulation were both similar to the wild-type protein. In contrast, target gene activation after stimulation with IFN was significantly reduced. This observation shows that the linker domain is responsible for ligand-dependent differential gene activation. Furthermore, it was demonstrated that the linker domain contributes to the inactivation of tyrosine-phosphorylated STAT1. Mutation of a highly conserved lysine residue in position 525 led to the disruption of a salt bridge with a glutamate residue in the SH2 domain of the same monomer. This salt bridge appears to be essential for the stabilization of parallel STAT1 dimers. Loss of this stabilization leads to a shift of STAT1 dimers to the antiparallel conformation. As compared to the wild-type protein, destabilizing this interaction resulted in a mutant with diminished nuclear accumulation, reduced tyrosine phosphorylation and target gene activation upon stimulation of cells with IFN . Further experiments including in vitro assays demonstrated that the inactivating T-cell phosphatase preferentially dephosphorylates STAT1-K525A as compared to the wild-type protein. To get further insight of the DNA-binding of STAT1 a point mutant of the DNA-binding domain was characterized. In contrast to other DNA-binding mutants this mutant has no direct contacts to DNA, but nevertheless showed a reduced affinity to DNA. This mutant shows that the architecture of the whole domain is required for functional DNA-binding.