Cytokine signaling by the Jak-STAT pathway is subject to complex negative regulation that limits the amplitude and duration of signal transduction. Inhibition of signaling also mediates negative crosstalk, whereby factors with opposing biological activities crossinhibit each other's function. Here, we investigated a rapidly inducible mechanism that inhibited Jak-STAT activation by IFN-alpha, a cytokine that is important for antiviral responses, growth control, and modulation of immune responses. IFN-alpha-induced signaling and gene activation were inhibited by ligation of Fc receptors and Toll-like receptors 7 and 8 in a PKCbeta-dependent manner. Neither PKCbeta nor PKCdelta influenced responses of cells treated with IFN-alpha alone. Inhibition of IFN-alpha signaling correlated with suppression of IFN-alpha-dependent antiviral responses. PKC-mediated inhibition did not require de novo gene expression but involved the recruitment of PKCbeta to the IFN-alpha receptor and interaction with protein tyrosine phosphatase SHP-2, resulting in augmented phosphatase activity. PKC-mediated inhibition of IFN-alpha signaling was abolished in SHP-2-deficient cells, demonstrating a pivotal role for SHP-2 in this inhibitory pathway. Together, our data describe a rapidly inducible, direct mechanism of inhibition of Jak-STAT signaling mediated by a PKCbeta-SHP-2 signaling pathway.