We previously reported that cationic multilamellar liposome containing the human interferon-β (huIFN-β) gene (IAB-1) demonstrated significant cytotoxic effect in the NC65 human renal cell carcinoma (RCC) cell line. In this study, we investigated the molecular mechanisms of IAB-1-induced apoptosis and cytotoxicity in RCC cells. Remarkable in vitro cytotoxic and apoptosis-inducing effects of IAB-1 against NC65 cells were observed by a colorimetric method and TUNEL staining, respectively. In contrast, treatment of NC65 cells with exogenously added huIFN-β protein induced low-level cytotoxicity without apoptosis. Neutralizing antibodies against huIFN-β significantly suppressed the cytotoxic effect of huIFN-β protein, but they were unable to block the effect of IAB-1. Cytotoxicity assays using transwell plates revealed that NC65 cells treated with IAB-1 did not secrete cytotoxic soluble factors other than IFN-β. Substantial enhancement of interferon-stimulated response element (ISRE) activity of NC65 cells by IAB-1 was demonstrated by promoter reporter assays. In addition, immunofluorescence using confocal microscopy revealed the intracellular expression of IFN-β and its receptor induced by IAB-1. The induction of c-Myc by IAB-1 was suggested by a cDNA macroarray and was confirmed by western blot analysis. These findings indicate that IAB-1 induces significant cytotoxicity and apoptosis in NC65 cells, possibly through enhanced ISRE activity, that is associated with increased intracellular localization of huIFN-β and IFN-receptor. Our data support the potential clinical application of IAB-1 gene therapy for RCC resistant to IFN.