Interleukin-1 (IL-1) costimulation is required for efficient IL-2 synthesis and IL-2 receptor (IL-2R) expression of T cells. The molecular events leading to these effects are largely unknown. We utilized an IL-1-responsive and an IL-1-non-responsive subclone of the mouse thymoma cell line EL4 to investigate how IL-1 activates IL-2 gene expression. We correlated IL-2 promoter activity with the activity of the endogenous IL-2 gene, thereby showing the biological significance of our results. Our experiments provide new functional data showing that a major target of IL-1 mediated costimulation is the chi B-like site, T cell element distal TCEd (GGGATTTCAC), of the IL-2 promoter. Thus, deletion or mutation of TCEd within a complete IL-2 promoter abrogated IL-1 costimulation in the IL-1 responsive EL4 subclone. Therefore, the TCEd element is functionally essential for the effect of IL-1. We also identified a nuclear factor (NF), IL-1 NF, that binds to the TCEd site after IL-1 stimulation. This factor was only present in the IL-1-responsive EL4 subclone and not in the IL-1-non-responsive subclone after IL-1 stimulation and did not appear after phytohemagglutinin (PHA)-treatment. Binding of IL-1 NF to the TCEd site was competed by a typical chi B oligonucleotide, suggesting that it is similar to NF-chi B in its DNA-binding properties. However, the TCEd element was only activated by costimulation with PHA and IL-1 whereas a typical chi B element was already activated by IL-1 alone. These data suggest that the biological function of the TCEd element of the IL-2 promoter differs from that of a canonical chi B element. Our data provide new evidence that IL-1 acts on the IL-2 promoter by activating the TCEd element via the transcription factor IL-1 NF. Furthermore, activation of this element requires two signals, delivered by IL-1 and PHA, in this way reflecting the activation requirement for the endogenous IL-2 gene.