The human 2'-5' oligoadenylate synthetases (OAS) form a conserved family of interferon-induced proteins consisting of four genes: OAS1, OAS2, OAS3 and the 2'-5' oligoadenylate synthetase-like gene (OASL). When activated by double-stranded RNA, OAS1-3 polymerize ATP into 2'-5'-linked oligoadenylates; 2'-5'-linked oligoadenylates, in turn, activate a latent endoribonuclease that degrades viral and cellular RNAs. In contrast, while the p59 OASL protein is highly homologous to the OAS family (45% identity), its 350 amino acid N-terminal domain lacks 2'-5' oligoadenylate synthetase activity. A C-terminal 164 amino acid domain, which is 30% homologous to a tandem repeat of ubiquitin, further distinguishes the p59 OASL protein and suggests that it serves a biological role which is distinct from other OAS family members. To dissect the function of p59 OASL, we utilized the yeast two-hybrid system to identify interacting proteins. Methyl CpG-binding protein 1 (MBD1), which functions as a transcriptional repressor, was identified as a strong p59 OASL interactor. Interestingly, like p59 OASL, transcription of the MBD1 gene was induced by interferon, indicating that these genes are co-ordinately regulated. The interaction was confirmed in vitro and in vivo and was mapped to the ubiquitin-like domain of p59 OASL. The p59 OASL-MBD1 interaction was specific, because p59 OASL did not interact with any of the other MBD family members and MBD1 did not interact with OAS1. These findings link the p59 OASL with MBD1 transcriptional control in the context of an interferon-stimulated cell, and provide the basis for future studies to examine the functional role of this interaction.