Bacterial pneumonia is a common public health problem associated with significant mortality, morbidity, and cost. Neutrophils are usually the earliest leukocytes to respond to bacteria in the lungs. Neutrophils rapidly sequester in the pulmonary microvasculature and migrate into the lung parenchyma and alveolar spaces, where they perform numerous effector functions for host defense. Previous studies showed that migrated neutrophils produce IFN-γ early during pneumonia induced by Streptococcus pneumoniae and that early production of IFN-γ regulates bacterial clearance. IFN-γ production by neutrophils requires Rac2, Hck/Lyn/Fgr Src family tyrosine kinases, and NADPH oxidase. Our current studies examined the mechanisms that regulate IFN-γ production by lung neutrophils during acute S. pneumoniae pneumonia in mice and its function. We demonstrate that IFN-γ production by neutrophils is a tightly regulated process that does not require IL-12. The adaptor molecule MyD88 is critical for IFN-γ production by neutrophils. The guanine nucleotide exchange factor CalDAG-GEFI modulates IFN-γ production. The CD11/CD18 complex, CD44, Toll-like receptors 2 and 4, TRIF, and Nrf2 are not required for IFN-γ production by neutrophils. The recently described neutrophil–dendritic cell hybrid cell, identified by its expression of Ly6G and CD11c, is present at low numbers in pneumonic lungs and is not a source of IFN-γ. IFN-γ produced by neutrophils early during acute S. pneumoniae pneumonia induces transcription of target genes in the lungs, which are critical for host defense. These studies underline the complexity of the neutrophil responses during pneumonia in the acute inflammatory response and in subsequent resolution or initiation of immune responses.