Nuclear receptors are a family of ligand regulated factors that exert homeostatic functions at the interface between metabolic and immune function. The farnesoid X receptor (FXR) is a bile acid sensor expressed in immune cells such as macrophages where it exerts counter-regulatory effects. FXR deficient mice demonstrate disregulated immune response. Expression of FXR is down-regulated in inflamed tissues but the mechanism that leads to FXR down-regulation by inflammatory mediators is unknown. In the present study we have investigated the effect of inflammation-related cytokines on macrophages and demonstrated that INFgamma is a potent inhibitor of FXR gene expression/function in macrophages. STAT1 silencing and over-expression experiments demonstrated that FXR repression is mediated by INFgamma dependent activation of STAT1. Since IFNgamma is a potent activator of STAT1 we searched for STAT1 binding sites in the human FXR genomic and identified a region of the human FXR gene between the second and third exon that contains three hypothetical STAT1 binding sites. RAW 264.7 transiently transfected with an FXR genomic reporter construct which contained the three STAT binding sites responded to IFNgamma with a robust decrease in the reporter activity, demonstrating the potent modulation of FXR transcription by IFNgamma. Chromatin immunoprecipitation assay revealed that this region was immunoprecipitated following treatment of macrophage cell lines and supershift assay demonstrated that STAT1 was able to bind one of three identified sites. In summary, these results suggest that IFNgamma induced STAT1 homodimers modulate the transcriptional repression of FXR gene in macrophages during inflammation-related cytokines.