POU domain proteins have been implicated as key regulators during development and lymphocyte activation. The POU domain protein T-cell factor beta 1 (TCF beta 1), which binds octamer and octamer-related sequences, is a potent transactivator. In this study, we showed that TCF beta 1 is phosphorylated following activation via the T-cell receptor or by stress-induced signals. Phosphorylation of TCF beta 1 occurred predominantly at serine and threonine residues. Signals which upregulate Jun kinase (JNK)/stress-activated protein kinase activity also lead to association of JNK with TCF beta 1. JNK associates with the activation domain of TCF beta 1 and phosphorylates its DNA binding domain. The phosphorylation of recombinant TCF beta 1 by recombinant JNK enhances the ability of TCF beta 1 to bind to a consensus octamer motif. Consistent with this conclusion, TCF beta 1 upregulates reporter gene transcription in an activation- and JNK-dependent manner. In addition, inhibition of JNK activity by catalytically inactive MEKK (in which methionine was substituted for the lysine at position 432) also inhibits the ability of TCF beta 1 to drive inducible transcription from the interleukin-2 promoter. These results suggest that stress-induced signals and T-cell activation induce JNK, which then acts on multiple cis sequences by modulating distinct transactivators like c-Jun and TCF beta 1. This demonstrates a coupling between the JNK activation pathway and POU domain proteins and implicates TCF beta 1 as a physiological target in the JNK signal transduction pathway leading to coordinated biological responses.