Previous research suggests that interferon binds to the cell surface, possibly by attachment to gangliosides. A two-component receptor system consisting of binding and activation sites has been proposed. This hypothesis is supported by the finding that interferon inhibits binding of cholera toxin and thyrotropin to their receptors suggesting possible common receptor sites. Moreover, an antiserum against cell surface components of interferon-sensitive cells has been shown to inhibit the action of interferon. However, to understand the interaction of interferon with the cell surface requires direct ligand-binding studies. I present here direct evidence that high-affinity binding of interferon to a specific cell surface receptor is an initial step in interferon action using biologically active purified 125I-labelled mouse interferon. Labelled interferon binds specifically to interferon-sensitive mouse leukaemia L1210 cells, whereas binding to interferon-resistant L1210 cells is nonspecific. Furthermore, specific binding to monolayer cultures of mouse L929 cells is compared with nonspecific binding to chick embryo fibroblasts insensitive to the action of mouse interferon.