Transcriptional induction of genes is an essential part of the cellular response to interferons. We have established a cDNA library from human lymphoblastoid Daudi cells treated for 16 h with human alpha/beta-interferon (IFN) and made use of differential screening to search for as yet unidentified IFN-regulated genes. In the course of this study, we have isolated a human cDNA that codes for a 20-kDa protein sharing striking homology with the product of the Xenopus laevis XPMC2 gene. This new gene is induced by both type I and II IFNs in various cell lines and will be referred to as ISG20 for interferon-stimulated gene product of 20 kDa. Confocal immunofluorescence analysis of the subcellular localization of ISG20 protein reveals that it is closely associated with PML and SP100 gene products within the large nuclear matrix-associated multiprotein complexes termed the PML nuclear bodies.