The innate immunity to viral infections induces a potent antiviral response mediated by interferons (IFN). Although IFN-gamma is detected during the acute stages of illness in the upper respiratory tract secretions and in the serum of influenza A virus-infected individuals, control of influenza A virus is not dependent upon IFN-gamma as evidenced by studies using anti-IFN-gamma Ab and IFN-gamma(-/-) mice. Thus, we hypothesized that IFN-gamma is not critical in host survival because influenza A virus has mechanisms to evade the antiviral activity of IFN-gamma. To test this, A549 cells, an epithelial cell line derived from lung adenocarcinoma, were infected with influenza virus strain A/Aichi/2/68 (H3N2) (Aichi) and/or stimulated with IFN-gamma to detect IFN-gamma-stimulated MHC class II expression. Influenza A virus infection inhibited IFN-gamma-induced up-regulation of HLA-DRalpha mRNA and the IFN-gamma induction of class II transactivator (CIITA), an obligate mediator of MHC class II expression. Nuclear translocation of Stat1alpha upon IFN-gamma stimulation was significantly inhibited in influenza A virus-infected cells and this was associated with a decrease in Tyr701 and Ser727 phosphorylation of Stat1alpha. Thus, influenza A virus subverts antiviral host defense mediated by IFN-gamma through effects on the intracellular signaling pathways.