Cytokine effects on immunity and inflammation often depend on the transcription factors termed signal transducers and activators of transcription (STATs), so STAT signaling pathways are candidates for influencing inflammatory disease. We reasoned that selective IFN responsiveness of the first STAT family member (Stat1) and Stat1-dependent immune-response genes such as intercellular adhesion molecule-1 (ICAM-1), IFN regulatory factor-1 (IRF-1), and Stat1 itself in airway epithelial cells provides a basis for detecting cytokine signaling abnormalities in inflammatory airway disease. On the basis of nuclear localization and phosphorylation, we found that epithelial Stat1 (but not other control transcription factors) was invariably activated in asthmatic compared with normal control or chronic bronchitis subjects. Furthermore, epithelial levels of activated Stat1 correlated with levels of expression for epithelial ICAM-1, IRF-1, and Stat1, and in turn, ICAM-1 levels correlated with T-cell accumulation in tissue. However, only low levels of IFN-gamma or IFN-gamma-producing cells were detected in airway tissue in all subjects. The results therefore provide initial evidence linking abnormal behavior of STAT pathways for cytokine signaling to the development of an inflammatory disease. In that context, the results also change the current scheme for asthma pathogenesis to one that must include a localized gain in transcriptional signal ordinarily used for a T helper 1-type cytokine (IFN-gamma) in combination with allergy-driven overproduction of T helper 2-type cytokines.