While it is well known that interferon-␥ (IFN␥) and tumor necrosis factor-␣ (TNF␣) play a role in the regulation of thyroid growth and differentiated functions, the cellular and molecular mechanisms involved in mediating the effects of IFN␥ and TNF␣ on thyroid function are unknown. In the present study, we used FRTL-5 rat thyroid cells to examine the effects of IFN␥ and TNF␣ on gene expression of transcription factor interferon regulatory factor-1 (IRF-1), which is involved in mediating the effects of these cytokines in a number of cell types. Northern blot analysis of FRTL-5 mRNA showed a single IRF-1 mRNA at 2.2 Kb. In quiescent FRTL-5 cells, IRF-1 mRNA levels were low but detectable by Northern analysis. Incubation of FRTL-5 cells with IFN␥ or TNF␣ resulted in a dose-and time-dependent increase in IRF-1 mRNA levels. We have shown that TNF-␣ and IFN-␥ act synergistically to block the TSH-induced increase in type I 5'-deiodinase (5'D-I) activity and 5'D-I gene expression in FRTL-5 rat thyroid cells. Incubation of FRTL-5 cells with IFN␥ and TNF␣ in combination, however, did not synergistically increase IRF-1 mRNA levels. Electrophoretic mobility shift assay (EMSA) revealed that IFN␥ induced the formation of a single complex to a IFN␥ activation site (GAS) probe in a dose dependent manner. Several lines of evidence suggest that TNF␣ activates transcription factor nuclear factor-B (NFB) through activation of protein kinase C (PKC) or the hydrolysis of sphingomyelin to ceramide in a number of cell types. Here we demonstrate that hydrolysis of sphingomyelin to ceramide by sphingomyelinase (SMase), but not activation of PKC by 12-O-tetradecanoylphorbol 13-acetate (TPA), was involved in the activation of NFB in FRTL-5 cells. Similarly, hydrolysis of sphingomyelin to ceramide, but not activation of PKC, resulted in an increased in IRF-1 mRNA levels in FRTL-5 cells. The present data demonstrate that IFN␥ and TNF␣ increase IRF-1 mRNA levels in FRTL-5 cells through activation of GAS and NFB binding proteins, respectively. Thus, our results suggest that upregulation of IRF-1 may play a role in mediating the effects of IFN␥ and TNF␣ on thyroid function. Our results also suggest that the induction of IRF-1 mRNA by IFN␥ and TNF␣ is not the cellular mechanism involved in the synergistic effect of these cytokines on thyroid function.