Synergistic actions between all-trans-retinoic acid (atRA) and interferon gamma(IFN gamma) on modulation of cellular functions have been reported both in vitro and in vivo. However, the mechanism of atRA-mediated regulation of IFN gamma signaling is poorly understood. In this study, we have used the human lung epithelial cell line A549 to examine the effect of atRA on IFN gamma-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 IFN gamma induced a faster, higher, and more stable expression of IRF-1 than IFN gamma 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 IFN gamma than by IFN gamma alone. Expression of IFN gamma 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 (RAR alpha), including atRA, 9-cis-retinoic acid, and Am580, sequentially increased the levels of IFN gamma receptor-1, activated signal transducer and activator of transcription-1, and IRF-1 and that an RAR alpha antagonist was able to inhibit the effects of atRA and Am580. In addition, atRA pretreatment affected the transcriptional functions of IFN gamma-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 RAR alpha ligand, regulates IFN gamma-induced IRF-1 by affecting multiple components of the IFN gamma signaling pathway, from the plasma membrane to the nuclear transcription factors.