Interferons regulate immunity by inducing DNA binding of the transcription factor STAT1 through Y701 phosphorylation. Transcription by STAT1 needs to be restricted to minimize the adverse effects of prolonged immune responses. It remains unclear how STAT1 inactivation is regulated such that the transcription output is adequate. Here we show that efficient STAT1 inactivation in macrophages is coupled with processive transcription. Ongoing transcription feeds back to reduce the promoter occupancy of STAT1 and, consequently, the transcriptional output. Once released from the promoter, STAT1 is ultimately inactivated by Y701 dephosphorylation. We observe similar regulation for STAT2 and STAT3, suggesting a conserved inactivation mechanism among STATs. These findings reveal that STAT1 promoter occupancy in macrophages is regulated such that it decreases only after initiation of the transcription cycle. This feedback control ensures the fidelity of cytokine responses and provides options for pharmacological intervention. Cytokines perform their functions as key regulators of immune responses through activation of the JAK-STAT signaling pathway (1). Inadequate (either low or exacerbated) cytokine signaling may result in diseases such as immunodeficiency, autoimmunity, or cancer (2, 3). The strength of cytokine responses is regulated by various positive and negative feedback mechanisms that act at all steps of the signaling pathway: the cytokine receptors, JAKs, and STAT transcription factors. Yet it remains unclear how the process of cytokine-induced transcription is controlled once the transcription machinery has been turned on by activated STAT.STAT1 is indispensable for the biological function of interferons (IFNs), which are crucial cytokines for antiviral and antibacterial immunity. STAT1 nuclear translocation and DNA binding are activated by JAK-mediated phosphorylation of Y701. Other modifications that tune STAT1 function in IFN signaling include CDK8-mediated S727 phosphorylation, IB kinase ε (IKKε)-mediated S708 phosphorylation, and K703 sumoylation (4-6). Y701-phosphorylated STAT1 binds to target gene promoters in two major forms: (i) STAT1 homodimers induced by type I, II, and III IFNs bind to gamma interferon-activated sequence (GAS) elements, and (ii) the trimeric interferon-stimulated gene factor 3 (ISGF3; composed of STAT1, STAT2, and IRF9) induced by type I and III IFNs binds to interferon-stimulated response elements (ISRE) (1, 7). The principal mechanism of STAT1 inactivation is Y701 dephosphorylation, which causes both STAT1 homodimers and ISGF3 to lose their DNA-binding activity and to relocate to the cytoplasm. The nuclear T-cell protein tyrosine phosphatase (TC-PTP) is the major Y701-directed phosphatase (8). STAT1 acetylation was reported to facilitate dephosphorylation by TC-PTP (9), but this issue has been controversial (10). The access of phosphatase to phosphorylated Y701 appears to be restricted, since DNA-bound STAT1 is protected from Y701 dephosphorylation (11,12). For type II IFN (IFN-␥) ...