The signals generated by the IFNgamma receptor to initiate mRNA translation and generation of protein products that mediate IFNgamma responses are largely unknown. In the present study, we provide evidence for the existence of an IFNgamma-dependent signaling cascade activated downstream of the phosphatidylinositol (PI) 3'-kinase, involving the mammalian target of rapamycin (mTOR) and the p70 S6 kinase. Our data demonstrate that p70 S6K is rapidly phosphorylated and activated during engagement of the IFNgamma receptor in sensitive cell lines. Such activation of p70 S6 kinase is blocked by pharmacological inhibitors of the PI 3' kinase and mTOR, and is abrogated in double-knockout mouse embryonic fibroblasts for the alpha and beta isoforms of the p85 regulatory subunit of the PI 3'-kinase. The IFNgamma-activated p70 S6 kinase subsequently phosphorylates the 40S S6 ribosomal protein on serines 235/236, to regulate IFNgamma-dependent mRNA translation. In addition to phosphorylation of 40S ribosomal protein, IFNgamma also induces phosphorylation of the 4E-BP1 repressor of mRNA translation on threonines 37/46, threonine 70, and serine 65, sites whose phosphorylation is required for the inactivation of 4E-BP1 and its dissociation from the eukaryotic initiation factor-4E (eIF4E) complex. Thus, engagement of the PI 3'-kinase and mTOR by the IFNgamma receptor results in the generation of two distinct signals that play roles in the initiation of mRNA translation, suggesting an important role for this pathway in IFNgamma signaling.