The inflammatory response is thought to play important roles in tissue healing. The hypothesis of this study was that the inflammatory cytokine interferon (IFN)-γ is produced endogenously following skeletal muscle injury and promotes efficient healing. We show that IFN-γ is expressed at both mRNA and protein levels in skeletal muscle following injury, and that the time course of IFN-γ expression correlated with the accumulation of macrophages, T-cells, and natural killer cells, as well as myoblasts, in damaged muscle. Cells of each type were isolated from injured muscle, and IFN-γ expression was detected in each cell type. We also demonstrate that administration of an IFN-γ receptor blocking antibody to wild-type mice impaired induction of interferon response factor-1, reduced cell proliferation, and decreased formation of regenerating fibers. IFN-γ null mice showed similarly impaired muscle healing associated with impaired macrophage function and development of fibrosis. In vitro studies demonstrated that IFN-γ and its receptor are expressed in the C2C12 muscle cell line, and that the IFN-γ receptor blocking antibody reduced proliferation and fusion of these muscle cells. In summary, our results indicate that IFN-γ promotes muscle healing, in part, by stimulating formation of new muscle fibers.