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Expression of IL-10 as a transgene inhibits murine mammary tumor growth and metastasis. Using differential display methodology, we sought genes whose expression was modulated by IL-10. We compared mRNA isolated from parental murine mammary 66.1 tumors, as well as tumors derived from neo^r-transfected cells and 6 different IL-10-expressing cell lines. We identified 2 cDNA products that were up-regulated in all 6 IL-10-expressing tumors in comparison to parental and 66-neo tumors. One cDNA corresponds to the murine guanylate-binding protein gene Gbp-1/Mag-1. The other cDNA corresponds to the chemokine Mig-1 (monokine induced by IFN-γ). Both genes were originally identified in IFN-γ-activated macrophages or macrophage cell lines. We now report that cultured mammary epithelial tumor cell lines also express both genes in response to treatment with IFN-γ and LPS. Furthermore, IFN-γ mRNA is elevated in IL-10-expressing tumors in comparison with parental or neo-transfected tumors. Thus, high-level expression of IL-10 as a transgene results in activation rather than suppression of IFN-γ as well as 2 IFN-γ-inducible genes. Up-regulation of host IFN-γ is critical to anti-tumor activity since IL-10 no longer inhibits tumor growth in hosts with a deletion in the IFN-γ gene. Additionally, Gbp-1/Mag-1 and Mig-1 gene induction no longer occur in IFN-γ mutant mice. Int. J. Cancer 80:624–629, 1999. © 1999 Wiley-Liss, Inc.