Interferon-gamma (IFN-gamma)-induced indoleamine 2,3-dioxygenase (IDO) activity inhibits the growth of susceptible intracellular pathogens by catalyzing the oxidative cleavage of the indole ring of L-tryptophan and depleting pools of the essential amino acid. Tumor necrosis factor-alpha (TNF-alpha) synergistically enhances the IDO activity induced by IFN-gamma at the level of transcription in human epithelial cells. The purpose of this study was to characterize the molecular mechanisms responsible for synergistic gene expression in response to IFN-gamma and TNF-alpha. It was found that IFN-gamma-induced mechanisms, such as the binding of Stat1 to gamma activation sequences (GAS) and IFN regulatory factor-1 (IRF-1) to IFN-stimulated response elements (ISREs), are more highly activated following treatment with IFN and TNF-alpha. This enhanced signal transduction may be due to the increase in IFN-gamma receptor (IFNGR) expression following combined cytokine stimulation and is a likely contributor to the synergy. Additionally, the contribution of a third previously uncharacterized GAS element that forms a complex with Stat1 was investigated using a plasmid reporter system that controls for copy number. When the GAS-3 sequence was included in the regulatory region, gene expression was significantly increased relative to a region containing the mutated GAS-3. This suggests that GAS-3 is transcriptionally active and contributes to IFN-gamma-induced regulation of the IDO gene.