Autocrine priming of cells by small quantities of constitutively produced type I interferon (IFN) is a well-known phenomenon. In the absence of type I IFN priming, cells display attenuated responses to other cytokines, such as anti-viral protection in response to IFNgamma. This phenomenon was proposed to be because IFNalpha/beta receptor1 (IFNAR1) is a component of the IFNgamma receptor (IFNGR), but our new data are more consistent with a previously proposed model indicating that regulated expression of STAT1 may also play a critical role in the priming process. Initially, we noticed that DNA binding activity of STAT1 was attenuated in c-Jun(-/-) fibroblasts because they expressed lower levels of STAT1 than wild-type cells. However, expression of STAT1 was rescued by culturing c-Jun(-/-) fibroblasts in media conditioned by wild-type fibroblasts suggesting they secreted a STAT1-inducing factor. The STAT1-inducing factor in fibroblast-conditioned media was IFNbeta, as it was inhibited by antibodies to IFNAR1, or when IFNbeta expression was knocked down in wild-type cells. IFNAR1(-/-) fibroblasts, which cannot respond to this priming, also expressed reduced levels of STAT1, which correlated with their poor responses to IFNgamma. The lack of priming in IFNAR1(-/-) fibroblasts was compensated by over-expression of STAT1, which rescued molecular responses to IFNgamma and restored the ability of IFNgamma to induce protective anti-viral immunity. This study provides a comprehensive description of the molecular events involved in priming by type I IFN. Adding to the previous working model that proposed an interaction between type I and II IFN receptors, our work and that of others demonstrates that type I IFN primes IFNgamma-mediated immune responses by regulating expression of STAT1. This may also explain how type I IFN can additionally prime cells to respond to a range of other cytokines that use STAT1 (e.g., IL-6, M-CSF, IL-10) and suggests a potential mechanism for the changing levels of STAT1 expression observed during viral infection.