Acts as a signaling pathway regulator involved in innate immune system response (PubMed:26342464, PubMed:29038465, PubMed:29350881). In response to interferon IFN-alpha, associates in a complex with signaling pathway regulator NMI to regulate immune response; the complex formation prevents proteasome-mediated degradation of IFI35 and correlates with IFI35 dephosphorylation (PubMed:10779520, PubMed:10950963). In complex with NMI, inhibits virus-triggered type I interferon/IFN-beta production (PubMed:26342464). In complex with NMI, negatively regulates nuclear factor NF-kappa-B signaling by inhibiting the nuclear translocation, activation and transcription of the NF-kappa-B subunit p65/RELA, resulting in the inhibition of endothelial cell proliferation, migration and re-endothelialization of injured arteries (PubMed:29350881). Beside its role as an intracellular signaling pathway regulator, also functions extracellularly as damage-associated molecular patterns (DAMPs) to promote inflammation when actively released by macrophage to the extracellular space during cell injury and pathogen invasion (PubMed:29038465). Macrophage-secreted IFI35 activates NF-kappa-B signaling in adjacent macrophages through Toll-like receptor 4/TLR4 activation, thereby inducing NF-kappa-B translocation from the cytoplasm into the nucleus which promotes the release of pro-inflammatory cytokines (PubMed:29038465). Homodimer (PubMed:8288566, PubMed:10950963). Also interacts with BATF (PubMed:8954125). Interacts with TRIM21 (PubMed:26342464). Interacts with NMI; the interaction is direct and is facilitated by TRIM21 (PubMed:10779520, PubMed:10950963, PubMed:26342464). Cytoplasmic IFI35 localizes in punctate granular structures (PubMed:10950963). Nuclear localization increased is stimulated by IFN-alpha (PubMed:8288566, PubMed:10950963). Extracelullar following secretion by macrophage (PubMed:29038465). Expressed in a wide range of cell types, including fibroblasts, macrophages, and epithelial cells. Up-regulated by interferons IFN-alpha and IFN-gamma. The NID domain 1 is involved in the negative regulation of p65/RELA transcription and the negative regulation of NF-kappa-B pathway activation. Phosphorylated. Dephosphorylation correlates with the formation of a complex with NMI. Due to a polymorphism at the 3'-splice acceptor site of intron 4. Belongs to the NMI family. Contaminating sequence. Sequence of unknown origin in the N-terminal part.