Type I (alpha, beta) and type II (gamma) interferons (IFNs) can restrict the growth of many cell types. INF-stimulated gene transcription, a key early event in IFN response, acts through the Janus kinase-signal transducers and activators of transcription pathway, in which both IFN-alpha and IFN-gamma activate the transcription factor Stat1. A cell line lacking Stat1 (U3A) was not growth-arrested by IFN-alpha or IFN-gamma, and experiments were carried out with U3A cells permanently expressing normal or various mutant forms of Stat1 protein. Only cells in which complete Stat1 activity was available (Stat1alpha) were growth-inhibited by IFN-gamma. A mutant that supports 20-30% normal transcription did not cause growth restraint. In contrast, IFN-alpha growth restraint was imposed by cells producing Stat1beta, which lacks transcriptional activation potential. This parallels earlier results showing the truncated Stat1 can function in IFN-alpha gene activation. In addition to experiments on long-term cultured cells, we also found that wild-type primary mouse embryonic fibroblasts were inhibited by IFNs, but fibroblasts from Stat1-deficient mouse embryos were not inhibited by IFNs.