The signal transduction and activator of transcription (Stat) gene family has been highly conserved throughout evolution. Gene duplication and divergence has produced 7 mammalian Stat genes, each of which mediates a distinct process. While some Stat proteins are activated by multiple cytokines, Stat2 is highly specific for responses to type I interferon. We have cloned mouse Stat2 and found that while its sequence was more divergent from its human homologue than any other mouse-human Stat pairs, it was fully functional even in human cells. Overall sequence identity was only 69%, compared with 85-99% similarity for other Stat genes, and several individual domains that still served similar or identical functions in both species were even less well conserved. The coiled-coil domain responsible for interaction with IRF9 was only 65% identical and yet mouse Stat2 interacted with either human or mouse IRF9; the carboxyl terminus was only 30% identical and yet both regions functioned as equal transactivation domains. Both mouse and human transactivation domains recruited the p300/CBP coactivator and were equally sensitive to inhibition by adenovirus E1A protein. Interestingly, the Stat3 carboxyl terminus also functioned as a transactivator capable of recruiting p300/CBP, as does the Stat1 protein, although with widely differing potencies. Yet these proteins share no sequence similarity with Stat2. These data demonstrate that highly diverged primary sequences can serve similar or identical functions, and that the minimal regions of similarity between human and mouse Stat2 may define the critical determinants for function.