Generalized underrepresentation of IFN-γ has been implicated in the development of allergic asthma. However, the role of local IFN-γ in the lung during the development of this disease has not been completely elucidated. We studied the influence of local pulmonary IFN-γ expression on the development of allergen-induced lung inflammation. To restrict our analysis to IFN-γ expression in the lung and to exclude influences of systemic IFN-γ production, we generated a transgenic mouse line with a targeted deletion of the IFN-γ gene and constitutive, lung-specific IFN-γ expression (Clara cell 10 [CC10]–IFN-γ–tg–IFN-γ–KO mice), and compared allergen-induced airway inflammation in these mice with that of wild-type and IFN-γ– KO mice on the C57BL/6 background. Cytokine quantification in lungs of mice with allergic airway inflammation revealed that pulmonary IFN-γ expression increased expression of IL-5 and IL-13. Consistent with this observation, eosinophilia in bronchoalveolar lavage of CC10–IFN-γ–tg–IFN-γ–KO mice was profoundly increased, indicating that this critical component of asthma is enhanced by local IFN-γ expression. In contrast, airway hyperresponsiveness and anti-ovalbumin-IgE serum levels were reduced by local IFN-γ expression. Together, our results demonstrate pleiotropic action of constitutive IFN-γ expression in the lung, and question the therapeutic value of IFN-γ in allergic asthma. Local expression of IFN-γ in the lung increases markers of allergic airway inflammation, but decreases airway hyperresponsiveness in a murine model of allergic-asthma