Tuberculosis is the seventh leading cause of morbidity and mortality in the world, with eight million cases per year. Animal and human studies demonstrate an enrichment of CD4 cells at sites of disease, with a more favorable clinical course when there is a Th1 response with the presence of gamma interferon (IFN-γ). We previously treated patients who had multidrug-resistant tuberculosis with recombinant IFN-γ (rIFN-γ) in aerosol form and were able to convert smear-positive cases to smear negative with 12 treatments over 1 month. We hypothesized that rIFN-γ would induce signal transducer and activator of transcription (STAT) and interferon regulatory factor (IRF) binding activity in alveolar macrophages (AM). AM treated in vitro showed clear upregulation of STAT-1 and IRF-1 by rIFN-γ. STAT-1 was not activated and IRF-1 was only weakly induced after 1 day of infection by Mycobacterium tuberculosis TN913. In bronchoalveolar lavage (BAL) cells obtained from 10 of 10 tuberculosis patients 10 ± 2 days post-antituberculosis treatment, there was no detectable STAT-1 or IRF-1 DNA-binding activity. After 4 weeks of treatment with rIFN-γ aerosol in addition to the antituberculosis drugs, 10 of 10 patients had increased STAT-1, IRF-1, and/or IRF-9 DNA-binding activity in BAL cells from lung segments shown radiographically to be involved and in those shown to be uninvolved. Symptoms and chest radiographs improved, and amounts of macrophage inflammatory cytokines and human immunodeficiency virus type 1 (HIV-1) viral loads (in five of five HIV-1-coinfected patients) declined in the second BAL specimens. rIFN-γ aerosol induces signal transduction and gene expression in BAL cells and should be evaluated for efficacy in a randomized, controlled clinical trial.