Successful medical use of interferon for chronic viral infections is increasingly dependent on understanding the biologic and molecular mechanisms of the interferon system. Interferon (IFN) is one of the body's natural defenses. Production of IFN is a defensive response to foreign components of microbes, tumors and antigens. This IFN response begins with the production of the IFN proteins (alpha, beta and gamma) which then induce antiviral, antimicrobial, antitumor, and immunomodulatory actions. Thus, the initial production or administration of IFN(s) does not protect directly but instead reacts with specific receptors on cell surfaces to activate cytoplasmic transduction signals that then enter the nucleus to stimulate cellular genes encoding a number of effector proteins which lead to the defensive actions. The known molecular, humoral and cellular mechanisms by which these effector proteins exert their antiviral activities are presented. In addition, the pathogenesis of chronic infections is overviewed in the context of the interferon defenses.