We demonstrated the induction of cell death in a hepatoma cell line by IFN-gamma and its possible mechanism. Among the 2 hepatitis B virus (HBV)-associated hepatoma cell lines, SNU-354 and SNU-368, IFN-gamma induced cell death and increased caspase-3 activity in SNU-368 but not in SNU-354. IFN-gamma induced several changes in the mRNA expression level of apoptosis-regulating genes, e.g., increased expression of Fas, caspase-1 and TNF-related apoptosis-inducing ligand (TRAIL). In particular, IFN-gamma potently increased the mRNA expression of TRAIL in both cell lines. However, it did not change the mRNA expression level of death-mediating TRAIL receptors, e.g., DR4 and DR5, which were constitutively expressed in both cell lines. In contrast, the decoy receptor DcR1 was expressed in SNU-354 but not in SNU-368, and its expression level in SNU-354 was increased by IFN-gamma. Another decoy receptor, DcR2, was constitutively expressed in both cell lines; however, its expression level in SNU-368 was decreased by IFN-gamma. In addition, exogenous recombinant TRAIL reduced viability in SNU-368, but not in SNU-354, cells. From these findings, we speculated that TRAIL up-regulation and the subsequent TRAIL-mediated apoptosis serve as a mechanism of IFN-gamma-induced cell death in SNU-368. To confirm this hypothesis, we demonstrated that soluble DR4-Fc fusion protein, a TRAIL pathway inhibitor, inhibited IFN-gamma-induced cell death in SNU-368. Our results demonstrated that IFN-gamma acts as an inducer of cell death through TRAIL-mediated apoptosis.