Functionally active gamma interferon (IFN-gamma) receptors consist of an alpha subunit required for ligand binding uction and a beta subunit required primarily for signaling. Although the receptor alpha chain has little is known about the specific role of the receptor beta chain in IFN-gamma signaling. Expression of the wild-type human IFN-gamma receptor beta chain in murine L cells that stably express the human IFN-gamma receptor alpha chain (L.hgR) produced a murine cell line (L.hgR.myc beta) that responded to human IFN-gamma. Mutagenesis of the receptor beta-chain intracellular domain revealed that only two closely spaced, membrane-proximal sequences (P263PSIP267 and I(270)EEYL(274)) are required for function. Coprecipitation, studies showed that these sequences are necessary for the specific and constitutive association of the receptor beta Chain with the JAK-2 tyrosine kinase. These experiments also revealed that the IFN-gamma receptor alpha and beta chains are not preassociated on the surface of unstimulated cells but rather are induced to associate in an IFN-gamma-dependent fashion. A chimeric protein in which the intracellular domain of the beta chain was replaced by JAK-2 complemented human IFN-gamma signaling and biologic responsiveness in L.hgR. In contrast, a c-src containing beta-chain chimera did not. These results indicate that the sole obligate role of the IFN-gamma receptor beta chain in signaling is to recruit JAK-2 into the ligand-assembled receptor complex.