In transplant rejection interferon (IFN)-γ regulates the recipient immune response but also acts directly on IFN-γ receptors in the graft. We investigated these direct actions by comparing rejecting kidneys from donors lacking IFN-γ receptors (GRKO mice) or control donors (129Sv/J) in CBA recipients. Beginning day 5, 129Sv/J kidneys displayed high major histocompatibility complex (MHC) expression, progressive infiltration by inflammatory cells, but no thrombosis and little necrosis, even at day 21. GRKO kidneys showed increasing fibrin thrombi in small veins, peritubular capillary congestion, hyaline casts, and patchy parenchymal necrosis, progressing to near total necrosis at day 10. Terminal dUTP nick-end labeling assays were positive only in the interstitial infiltrate, confirming that massive cell death in GRKO transplants was not apoptotic. Paradoxically, GRKO kidneys showed little donor MHC induction and less inflammatory infiltration. Both GRKO and 129Sv/J allografts evoked vigorous host immune responses including alloantibody and mRNA for cytotoxic T cell genes (perforin, granzyme B, Fas ligand), and displayed similar expression of complement inhibitors (CD46, CD55, CD59). GRKO kidneys displayed less mRNA for inducible nitric oxide synthase and monokine inducible by IFN-γ but increased heme oxygenase-1 mRNA. Thus IFN-γ acting on IFN-γ receptors in allografts promotes infiltration and MHC induction but prevents early thrombosis, congestion, and necrosis.