Disruption of the normal resolution process of inflammation-induced mucous cell hyperplasia may lead to sustained mucous hypersecretion in chronic diseases. During prolonged exposure of mice to allergen, IFN-gamma reduces mucous cell hyperplasia, but the signaling responsible for the cell death is largely unknown. A brief phosphorylation of STAT1 by IFN-gamma was required for cell death in airway epithelial cells (AEC), and during prolonged exposure to allergen, mucous cell hyperplasia remained elevated in STAT1(-/-) but was resolved in STAT1(+/+) mice. Although IFN-gamma treatment of primary human AECs and other airway cell lines left Bax protein levels unchanged, it caused translocation of Bax from the cytosol to the endoplasmic reticulum (ER) but not to the mitochondria. Localization of Bax to the ER was observed in IFN-gamma-treated primary AECs isolated from STAT1(+/+) mice but not in cells from STAT1(-/-) mice. In addition, ER Bax was detected in mucous cells of STAT1(+/+) but not STAT1(-/-) airways of mice exposed to allergen for prolonged periods. IFN-gamma did not release cytochrome c from mitochondria but reduced ER calcium stores and dilated the ER, confirming that the IFN-gamma-induced cell death is mediated through changes localized in the ER. Collectively, these observations suggest that STAT1-dependent translocation of Bax to the ER is crucial for IFN-gamma-induced cell death of AECs and the resolution of allergen-induced mucous cell hyperplasia.