Interferons inhibit activation of STAT6 by interleukin 4 in human monocytes by inducing SOCS-1 gene expression. Interferons (IFNs) inhibit induction by IL-4 of multiple genes in human monocytes. However, the mechanism by which IFNs mediate this inhibition has not been defined. IL-4 activates gene expression by inducing tyrosine phosphorylation, homodimerization, and nuclear translocation of the latent transcription factor, STAT6 (signal transducer and activator of transcription-6). STAT6-responsive elements are characteristically present in the promoters of IL-4-inducible genes. Because STAT6 activation is essential for IL-4-induced gene expression, we examined the ability of type I and type II IFNs to regulate activation of STAT6 by IL-4 in primary human monocytes. Pretreatment of monocytes with IFN-beta or IFN-gamma, but not IL-1, IL-2, macrophage colony-stimulating factor, granulocyte/macrophage colony-stimulating factor, IL-6, or transforming growth factor beta suppressed activation of STAT6 by IL-4. This inhibition was associated with decreased tyrosine phosphorylation and nuclear translocation of STAT6 and was not evident unless the cells were preincubated with IFN for at least 1 hr before IL-4 stimulation. Furthermore, inhibition by IFN could be blocked by cotreatment with actinomycin D and correlated temporally with induction of the JAK/STAT inhibitory gene, SOCS-1. Forced expression of SOCS-1 in a macrophage cell line, RAW264, markedly suppressed trans-activation of an IL-4-inducible reporter as well as IL-6- and IFN-gamma-induced reporter gene activity. These findings demonstrate that IFNs inhibit IL-4-induced activation of STAT6 and STAT6-dependent gene expression, at least in part, by inducing expression of SOCS-1.