Induction of high systemic levels of type 1 interferons (IFNs) IFN-alpha and IFN-beta is a hallmark of many viral infections. In addition to their potent antiviral effects, these cytokines mediate a number of immunoregulatory functions and can promote IFN-gamma expression in T cells. However, during viral infections of mice IFN-gamma production is not always observed at the same time as systemic IFN-alpha/beta production and when, elicited at these times, is IFN-alpha/beta-independent. We demonstrate that type 1 interferons not only fail to induce, but also act to inhibit, IFN-gamma expression by both NK and T cells. The mechanism of inhibition is dependent upon the IFN-alpha/beta receptor and the signal transducer and activator of transcription 1 (STAT1). In the absence of STAT1, not only are the IFN-alpha/beta-mediated inhibitory effects completely abrogated, but the cytokines themselves can induce IFN-gamma expression. These results indicate that endogenous biochemical pathways are in place to negatively regulate NK and T cell IFN-gamma expression elicited by IFN-alpha/beta or other stimuli, at times of innate responses to viral infections. They also show that type 1 interferon signaling can occur through STAT1-dependent and independent mechanisms and suggest that efficient induction of IFN-gamma expression by IFN-alpha/beta requires STAT1 regulation. Such immunoregulatory pathways may be critical for shaping the endogenous innate and virus-specific adaptive immune responses to viral infections.