The TFIID components TAF7 and TAF1 regulate eukaryotic transcription initiation. TAF7 regulates transcription initiation of TAF1-dependent genes by binding to the acetyltransferase (AT) domain of TAF1 and inhibiting the enzymatic activity that is essential for transcription. TAF7 is released from the TAF1/TFIID complex upon completion of preinitiation complex assembly, allowing transcription to initiate. However, not all transcription is TAF1-dependent and the role of TAF7 in regulating TAF1-indepedent transcription has not been defined. The IFN-gamma--induced transcription factor CIITA is a coactivator and general transcription factor that regulates both MHC Class I and Class II gene transcription, and is thus critical to activated immune response. Known as the master regulator of Class II expression, CIITA is required for both Class II transcription and activated Class I expression. Its deficiency is linked to bare lymphocyte syndrome. Comparison of eukaryotic basal class I transcription and interferon-activated transcription initiation reveals similar preinitiation complex recruitment mechanisms, and striking parallels between their respective critical components, the TATA-binding protein (TBP)-associated factor 1 (TAF1) and CIITA. Both TAF1 and CIITA possess instrinsic acetyltransferase (AT) activity required to activate MHC transcription, which is regulated by TAF7. Moreover, CIITA can bypass the requirement for TAF1 to activate both the MHC class I and II promoters. TAF1 has two distinct kinase activities, located with its amino-terminal and carboxy-terminal domains. However, despite the striking functional parallels between CIITA and TAF1, no similar kinase activity has been reported for CIITA thus far. We have now identified the transcriptional coactivator CIITA as a novel atypical serine-threonine kinase whose substrates include various general transcription factors. We have characterized the kinase activity of the protein and mapped the putative kinase domains. We have proposed a model in which the kinase activity of CIITA serves a function similar to that of TAF1, in which it regulates TAF7 binding and release, and thus MHC transcription initiation. This may elucidate a novel role for CIITA in the regulation of activated transcription initiation and stimulated immune response during pathogenic infection.