Cystic fibrosis (CF) airway epithelial cells are more susceptible to viral infection due to impairment of the innate host defense pathway of nitric oxide (NO). NO synthase-2 (NOS2) expression is absent, and signal transducer and activator of transcription (STAT) 1 activation is reduced in CF. We hypothesized that the IFN-gamma signaling pathway, which leads to NOS2 gene induction in CF airway epithelial cells, is defective. In contrast to a lack of NOS2 induction, the major histocompatibility complex class 2, an IFN-gamma-regulated delayed-responsive gene, is similarly induced in CF and non-CF airway epithelial (NL) cells, suggesting an NOS2-specific defect in the IFN-gamma signaling pathway. STAT1 and activator protein-1, both required for NOS2 gene expression, interact normally in CF cells. Protein inhibitor of activated STAT1 is not increased in CF cells. IFN-gamma induces NOS2 expression in airway epithelial cells through an autocrine mechanism involving synthesis and secretion of IFN-gamma-inducible mediator(s), which activates STAT1. Here, CF cells secrete IFN-gamma-inducible factor(s), which stimulate NOS2 expression in NL cells, but not in CF cells. In contrast, IFN-gamma-inducible factor(s) similarly inhibit virus in CF and NL cells. Thus autocrine activation of NOS2 is defective in CF cells, but IFN-gamma induction of antiviral host defense is intact.