Interferon gamma (IFN-γ) plays a role in a variety of lung inflammatory responses, and corticosteroids are frequently employed as a treatment in these conditions. Therefore, the effect of IFN-γ, of the corticosteroid dexamethasone (Dex), or of both on gene expression was studied in normal human bronchial epithelial (NHBE) cells. NHBE cells were exposed to medium alone, IFN-γ (300 U/ml), Dex (10⁻⁷ M), or both IFN-γ and Dex for 8 or 24 h. Gene expression was examined using oligonucleotide microarrays. A principal components analysis demonstrated that the IFN-γ treatment effect was the primary source of differences in the data. With a 5% false discovery rate, of the 66 genes upregulated by IFN-γ by twofold or greater at 8 h and 287 genes upregulated at 24 h, coincubation with Dex inhibited the expression of 2 genes at 8 h and 45 genes at 24 h. Prominent among these were cytokines and secreted proteins. Dex cotreatment increased expression of 65 of the 376 genes that were inhibited by IFN-γ by 50% at 24 h. The majority of these genes encode cell cycle or nuclear proteins. Dex alone increased the expression of only 22 genes and inhibited the expression of 7 genes compared with controls at 24 h. The effect of Dex on IFN-γ-induced changes suggests a specific, targeted effect on IFN-γ responses that is substantially greater than the effect of Dex alone. Dex had little effect on the immediate early response to IFN-γ but a significant effect on the late responses.