Stat1alpha is a latent cytoplasmic transcription factor activated in response to interferon-gamma (IFN-gamma). The C-terminal 38 amino acids of Stat1alpha are required to trigger transcription and therefore may possibly serve as a transcription activation domain (TAD). Here we show that the C-terminus of Stat1alpha is an independent TAD which can interact with a specific group of nuclear proteins. Mutation of the Stat1 Ser727 and Leu724 decreases its transcriptional activity and affinity for the nuclear proteins. One of the interacting proteins was identified as MCM5, a member of the mini-chromosome maintenance (MCM) family involved in DNA replication. Both in vitro and in vivo interaction of Stat1alpha and MCM5 were demonstrated. Furthermore, the in vitro interaction required Ser727 and was enhanced by its phosphorylation. Transient over-expression of MCM5 enhanced transcriptional activation by Stat1alpha in a Ser727-dependent manner. Finally, changes in the level of nuclear localized MCM5 during the cell cycle correlated with the changes in transcriptional response to IFN-gamma acting through Stat1alpha. These results strongly suggest that MCM5 is recruited through interaction with Stat1alpha in a Ser727- and Leu724-dependent manner to play a role in optimal transcriptional activation.