This study examines the role of the signal transducer and activator of transcription 1 (STAT1) in induction of lipopolysaccharide (LPS)-stimulated gene expression both in vitro and in vivo. LPS-induced expression of an interferon (IFN)-inducible 10-kDa protein (IP-10), IFN regulatory factor-1 (IRF-1), and inducible nitric oxide synthase (iNOS) mRNAs was severely impaired in macrophages prepared fromStat1−/− mice, whereas levels of tumor necrosis factor α and KC (a C-X-C chemokine) mRNA in LPS-treated cell cultures were unaffected. A similar deficiency in LPS-induced gene expression was observed in livers and spleens from Stat1−/− mice. The reduced LPS-stimulated gene expression seen in Stat1−/− macrophages was not the result of reduced activation of nuclear factor κB. LPS stimulated the delayed activation of both IFN-stimulated response element and IFN-γ-activated sequence binding activity in macrophages from wild-type mice. Activation of these STAT1-containing transcription factors was mediated by the intermediate induction of type I IFNs, since the LPS-induced IP-10, IRF-1, and iNOS mRNA expression was markedly reduced in macrophages fromIFN-α/βR−/− mice and blocked by cotreatment with antibodies against type I IFN. These results indicate that indirect activation of STAT1 by LPS-induced type I IFN participates in promoting optimal expression of LPS-inducible genes, and they suggest that STAT1 may play a critical role in innate immunity against gram-negative bacterial infection.