The transcription factor CHOP (C/EBP homologous protein 10) is a bZIP protein induced by a variety of stimuli that evoke cellular stress responses and has been shown to arrest cell growth and to promote programmed cell death. CHOP cannot form homodimers but forms stable heterodimers with the C/EBP family of activating transcription factors. Although initially characterized as a dominant negative inhibitor of C/EBPs in the activation of gene transcription, CHOP-C/EBP can activate certain target genes. Here we show that CHOP interacts with members of the immediate-early response, growth-promoting AP-1 transcription factor family, JunD, c-Jun, and c-Fos, to activate promoter elements in the somatostatin, JunD, and collagenase genes. The leucine zipper dimerization domain is required for interactions with AP-1 proteins and transactivation of transcription. Analyses by electrophoretic mobility shift assays and by an in vivo mammalian two-hybrid system for protein-protein interactions indicate that CHOP interacts with AP-1 proteins inside cells and suggest that it is recruited to the AP-1 complex by a tethering mechanism rather than by direct binding of DNA. Thus, CHOP not only is a negative or a positive regulator of C/EBP target genes but also, when tethered to AP-1 factors, can activate AP-1 target genes. These findings establish the existence of a new mechanism by which CHOP regulates gene expression when cells are exposed to cellular stress.