Transcription factors of the NFAT family regulate the production of effector proteins that coordinate the immune response. The immunosuppressive drugs FK506 and cyclosporin A (CsA) act by blocking a Ca2+-mediated signalling pathway leading to NFAT. Although FK506 and CsA have enabled human organs to be transplanted routinely, the toxic side-effects of these drugs limit their usage. This toxicity might be absent in antagonists that target NFAT directly. As a first step in the structure-based search for NFAT antagonists, we now report the identification and solution structure of a 20K domain of NFATc (NFATc-DBD) that is both necessary and sufficient to bind DNA and activate transcription cooperatively. Although the overall fold of the NFATc DNA-binding domain is related to that of NF-kappaB p50 (refs 2, 3), the two proteins use significantly different strategies for DNA recognition. On the basis of these results, we present a model for the cooperative complex formed between NFAT and the mitogenic transcription factor AP-1 on the interleukin-2 enhancer.