Virus infection induces the production of type I and type II interferons (IFN-I and IFN-II), cytokines that mediate the antiviral response. IFN-I (IFN-α and IFN-β) induces the assembly of IFN-stimulated gene factor 3 (ISGF3), a multimeric transcriptional activation complex composed of STAT1, STAT2, and IFN regulatory factor 9. IFN-II (IFN-γ) induces the homodimerization of STAT1 to form the gamma-activated factor (GAF) complex. ISGF3 and GAF bind specifically to unique regulatory DNA sequences located upstream of IFN-I-and IFN-II-inducible genes, respectively, and activate the expression of distinct sets of antiviral genes. The balance between type I and type II IFN pathways plays a critical role in orchestrating the innate and adaptive immune systems. Here, we show that the phosphorylation of STAT1 by IκB kinase epsilon (IKKε) inhibits STAT1 homodimerization, and thus assembly of GAF, but does not disrupt ISGF3 formation. Therefore, virus and/or IFN-I activation of IKKε suppresses GAF-dependent transcription and promotes ISGF3-dependent transcription. In the absence of IKKε, GAF-dependent transcription is enhanced at the expense of ISGF3-mediated transcription, rendering cells less resistant to infection. We conclude that IKKε plays a critical role in regulating the balance between the IFN-I and IFN-II signaling pathways.H ost immune defenses counteract virus infection by coordinating an intracellular innate immune response with the adaptive immune response. Systemically, the antiviral defense is generally cell-mediated, involving the recruitment and activation of dendritic cells, macrophages, neutrophils, and natural killer cells to the site of infection (1). This initial response is followed by a second wave of specific antiviral defenses involving cytotoxic T cells and antibodies generated from plasma B cells (2). The success of the adaptive immune response is intricately linked to the intracellular innate defenses initiated at the site of infection (1). The signaling required to coordinate the successful induction of the intracellular immune response to virus infection relies on the activation of interferon (IFN) genes, which encode cytokines with antiviral and immunomodulatory activity (3).The vertebrate type I IFN (IFN-I) genes are arranged in a large gene cluster consisting of a single IFNβ gene and several tandemly arranged IFNα genes encoding distinct isotypes (4, 5). In contrast to type I IFNs, type II IFN (IFN-II) is encoded by a single IFNγ gene. Although IFN-I mediates cellular resistance to virus infection, IFN-II confers limited cellular protection through the induction of a subset of genes that are shared between the IFN-I and IFN-II transcriptomes (6, 7). Virus infection leads to the activation of IFN-I genes and the secretion of IFNα and -β, which bind to IFN receptors at the cell surface. This, in turn, leads to the transcriptional activation of a group of IFN-stimulated genes (ISGs), and these ISGs collectively establish a nonpermissive environment for virus replication (6).The transcription...