IFN-gamma induction of C1 inhibitor (C1INH) is mediated by an IFN-gamma-activated sequence (GAS), via binding of signal transducer and activator of transcription 1 (STAT1). These studies focused on the factors responsible for down-regulation of nuclear STAT1 in hepatocytes, the primary site of synthesis of C1INH. The activity of nuclear STAT1 following stimulation with IFN-gamma was sustained with the phosphatase inhibitor, pervanadate, or the proteasome inhibitor, lactacystin. Pervanadate prolonged STAT1 activation and blocked the inactivation of nuclear STAT1. Binding of ubiquitin to phosphorylated STAT1 was detectable in cells treated with lactacystin. Staurosporine only moderately decreased the prolongation of nuclear phosphorylated STAT1 after pretreatment with pervanadate or lactacystin. An antisense mitogen-activated protein kinase phosphatase (MKP-1) oligonucleotide prolonged the accumulation of phosphorylated STAT1. These data are consistent with the hypothesis that down-regulation of IFN-gamma-mediated nuclear STAT1 binding in hepatocytes involves both dephosphorylation by MKP-1 and degradation via proteolysis by the ubiquitin-dependent proteasome pathway. (C) 2002 Elsevier Science (USA). All rights reserved.