The transcription factor TFII-I binds to distinct promoter sequences including an initiator element in several eukaryotic genes. Here we demonstrate that TFII-I is phosphorylated in vivo at serine/threonine and tyrosine residues in the absence of any apparent extracellular signals, This "basal" phosphorylation of TFII-I is not required and does not affect its specific DNA binding, but is critical for its in vitro transcriptional properties via the V beta promoter. To better assess the functional role of phosphorylation in regulating TFII-I activity, we focused on tyrosine phosphorylation of TFII-I. Ectopically expressed recombinant TFII-I, like its native counterpart, exhibits tyrosine phosphorylation in the absence of distinct extracellular signals. More important, mutation of a potential consensus tyrosine phosphorylation site in TFII-I leads to severe reduction in its basal transcriptional activation of the V beta promoter in vivo. Taken together, these data suggest that tyrosine phosphorylation of TFII-I is important for its initiator-dependent transcriptional activity.