In resting primary T lymphocytes the interleukin 2 (IL-2) gene is silenced by a repressor binding to the Pud element spanning positions −292 to −264 upstream of the cap site. Upon T-cell activation, this silencer is displaced by a positive transcription factor (TF) and the gene is derepressed and transcribed. Cyclosporin A (CsA) and FK506 interfere with normal derepression of the IL-2 gene. Both drugs exert no direct effect on basal transcription of the IL-2 or control viral genes. Direct addition does not abolish the active state of positive TFs present in proteins from activated T cells. However, if T cells are activated in the presence of either drug, their proteins not only fail to derepress, but efficiently and irreversibly silence IL-2 transcription. DNA-protein binding data show that proteins present in drug-treated cells form retarded complexes corresponding in size to the silencer and positive TF. Thus, in drug-treated cells a functional silencer persists, and a positive TF-like factor appears which is functionally abnormal. Moreover, drug-treated T cells appear to form a component that prevents functioning of normal positive TF.