Activating transcription factor (ATF)-2 is a member of the ATF/cAMP response element-binding protein family of transcription factors, and its trans-activating capacity is enhanced by stress-activated protein kinases such as c-Jun NH(2)-terminal kinase (JNK) and p38. However, little is known about the in vivo roles played by ATF-2. Here, we identified the Drosophila homologue of ATF-2 (dATF-2) consisting of 381 amino acids. In response to UV irradiation and osmotic stress, Drosophila p38 (dp38), but not JNK, phosphorylates dATF-2 and enhances dATF-2-dependent transcription. Consistent with this, injection of dATF-2 double-stranded RNA (dsRNA) into embryos did not induce the dorsal closure defects that are commonly observed in the Drosophila JNK mutant. Furthermore, expression of the dominant-negative dp38 enhanced the aberrant wing phenotype caused by expression of a dominant-negative dATF-2. Similar genetic interactions between dATF-2 and the dMEKK1-dp38 signaling pathway also were observed in the osmotic stress-induced lethality of embryos. Loss of dATF-2 in Drosophila S2 cells by using dsRNA abrogated the induction of 40% of the osmotic stress-induced genes, including multiple immune response-related genes. This indicates that dATF-2 is a major transcriptional factor in stress-induced transcription. Thus, dATF-2 is critical for the p38-mediated stress response.