Synergistic actions between all-trans-retinoic acid (atRA) and interferon gamma (IFNgamma) on modulation of cellular functions have been reported both in vitro and in vivo. However, the mechanism of atRA-mediated regulation of IFNgamma signaling is poorly understood. In this study, we have used the human lung epithelial cell line A549 to examine the effect of atRA on IFNgamma-induced expression of IFN regulatory factor-1 (IRF-1), an important transcription factor involved in cell growth and apoptosis, differentiation, and antiviral and antibacterial immune responses. At least 4 h of pretreatment with atRA followed by suboptimal concentrations of IFNgamma induced a faster, higher, and more stable expression of IRF-1 than IFNgamma alone. Actinomycin D completely blocked the induction of IRF-1 by the combination, suggesting regulation at the transcriptional level. Further, we found that activation of signal transducer and activator of transcription-1 was induced more dramatically by atRA and IFNgamma than by IFNgamma alone. Expression of IFNgamma receptor-1 on the cell surface was also increased upon atRA pretreatment. Experiments using receptor-selective retinoids revealed that ligands for retinoic acid receptor-alpha (RARalpha), including atRA, 9-cis-retinoic acid, and Am580, sequentially increased the levels of IFNgamma receptor-1, activated signal transducer and activator of transcription-1, and IRF-1 and that an RARalpha antagonist was able to inhibit the effects of atRA and Am580. In addition, atRA pretreatment affected the transcriptional functions of IFNgamma-induced IRF-1, increasing its nuclear localization and DNA binding activity as well as the transcript levels of IRF-1 target genes. These results suggest that atRA, an RARalpha ligand, regulates IFNgamma-induced IRF-1 by affecting multiple components of the IFNgamma signaling pathway, from the plasma membrane to the nuclear transcription factors.