The molecular mechanisms involved in the regulation of gene expression by transforming growth factor-beta (TGF-beta) have been analyzed. We show that TGF-beta specifically induces the activity of the proline-rich trans-activation domain of CTF-1, a member of the CTF/NF-I family of transcription factors. A TGF-beta-responsive domain (TRD) in the proline-rich transcriptional activation sequence of CTF-1 was shown to mediate TGF-beta induction in NIH-3T3 cells. Mutagenesis studies indicated that this domain is not the primary target of regulatory phosphorylations, suggesting that the growth factor may regulate a CTF-1-interacting protein. A two-hybrid screening assay identified a nucleosome component, histone H3, as a specific CTF-1-interacting protein in yeast. Furthermore, the CTF-1 trans-activation domain was shown to interact with histone H3 in both transiently and stably transfected mammalian cells. This interaction requires the TRD, and it appears to be upregulated by TGF-beta in vivo. Moreover, point mutations in the TRD that inhibit TGF-beta induction also reduce interaction with histone H3. In vitro, the trans-activation domain of CTF-1 specifically contacts histone H3 and oligomers of histones H3 and H4, and full-length CTF-1 was shown to alter the interaction of reconstituted nucleosomal cores with DNA. Thus, the growth factor-regulated trans-activation domain of CTF-1 can interact with chromatin components through histone H3. These findings suggest that such interactions may regulate chromatin dynamics in response to growth factor signaling.