The recently cloned ATM gene has been shown to bear considerable homology to phosphatidylinositol 3 kinases and, therefore, its product may function in signal transduction. In this study, we report constitutively elevated levels of two IFN-beta-inducible proteins, ubiquitin cross-reactive protein (UCRP), and low molecular weight protein (LMP2), in human fibroblasts with the inherited disease ataxia telangiectasia (AT). Using immunoblotting, it was found that a M(r) 15,000 band representing free UCRP was hardly detectable in normal cells, while it was the predominant band in AT cells. Similarly, the expression of a M(r) 23,000 protein, LMP2 was found to be higher in AT cells than in normal cells. Culturing three successive passages of the AT cell line in the presence of different concentrations of neutralizing antibodies against IFN-beta caused partial and complete reduction, respectively, of the free UCRP and LMP2 signals to normal levels. These results indicate that UCRP and LMP2 pools may be basally elevated in AT cells due to constitutive activation of the IFN-beta induction pathway and are in keeping with the recently reported constitutive activation of the NF-kappaB transcriptional activator in AT cells.