IFN␥ exerts multiple biological effects on effector cells by regulating many downstream genes, including smooth muscle-specific genes. However, the molecular mechanisms underlying IFN␥-induced inhibition of smooth muscle-specific gene expression remain unclear. In this study, we have shown that serum response factor (SRF), a common transcriptional factor important in cell proliferation, migration, and differentiation, is targeted by IFN␥ in a STAT1-dependent manner. We show that the molecular mechanism by which IFN␥ regulates SRF is via activation of the 2-5A-RNase L system, which triggers SRF mRNA decay and reduced SRF expression. As a result, decreased SRF expression reduces expression of SRF target genes such as smooth muscle ␣-actin and smooth muscle myosin heavy chain. Additionally, IFN␥ reduced p300 and acetylated histone-3 binding in both smooth muscle ␣-actin and SRF promoters, epigenetically decreasing smooth muscle ␣-actin and SRF transcriptional activation. Our data reveal that SRF is a novel IFN␥-regulated gene and further elucidate the molecular pathway between IFN␥, IFN␥-regulated genes, and SRF and its target genes.IFN␥, a pleiotropic cytokine that is primarily produced by T cells and NK cells, plays a complex and central role in antiviral, antiproliferative, antifibrogenesis, antitumor, and immunomodulatory activities (reviewed in Refs. 1 and 2). The complexity of such a variety of IFN␥ effects appears to be achieved by its signaling to over 200 genes, leading to a highly networked pattern of cell-specific gene regulation (3). In the canonical pathway, through binding to cognate IFN type II receptors, IFN␥ initiates a cascade that includes JAK family kinases and the STAT1 family of transcriptional factors to induce STAT1-dependent gene expression, which largely mediates the actions of IFN␥ (reviewed in Ref. 4). Among IFN␥-regulated genes, smooth muscle ␣-actin, a cytoskeleton protein that is critical in smooth muscle cell differentiation (reviewed in Ref. 5), myofibroblast activation (reviewed in Ref. 6), and epithelial-mesenchymal transition (7), is negatively regulated by IFN␥ (8, 9). Although the observation that IFN␥ regulates smooth muscle ␣-actin is well established, the molecular mechanisms underlying IFN␥-induced inhibition of smooth muscle ␣-actin expression remain unclear.Regulation of smooth muscle ␣-actin expression is complex, having been studied extensively in cardiovascular and vascular diseases, particularly in smooth muscle cells (reviewed in Ref. 5). It has been well demonstrated that most muscle-specific genes, including smooth muscle ␣-actin, are SRF 2 target genes. SRF binds to the CArG boxes (CC(A/T) 6 GG) of the smooth muscle ␣-actin gene promoter and activates smooth muscle ␣-actin transcription (reviewed in Ref. 10). Extracellular factors can exert their effects on smooth muscle gene expression through regulating SRF or/and SRF cofactors (11). TGF, a well characterized cytokine important in smooth muscle cell differentiation and epithelial-mesenchymal transition, up-reg...