Serum response factor (SRF), a transcription factor that binds to the serum response element (SRE) of the c-fos proto-oncogene, activates transcription of an SRE-containing reporter plasmid in vitro. We describe here preincubation experiments which indicate that SRF activates transcription by facilitating the formation of active preinitiation complexes. Full activation by SRF occurred if SRF was preincubated with the general transcription factors. However, if the general transcription factors were preincubated and SRF was added subsequently, only poor activation of transcription was observed. This suggests that SRF must be present during preinitiation complex formation and that this complex is refractory to activation if SRF is absent during its formation. We have fractionated the general transcription factors and found that only a highly purified fraction containing the TATA-binding factor TFIID (and other unidentified components) must be present during preincubation for maximal transcriptional induction by SRF. This supports a model in which SRF activates transcription by affecting the conformation of TFIID bound to the promoter. Also of interest was the finding that recombinant human TFIID expressed in bacteria cannot mediate SRF-activated transcription, although it does support basal transcription. These results suggest that SRF may affect TFIID via a cofactor or coactivator.