Recombinant vaccinia viruses (VV)-encoding murine interferon-gamma (IFN-gamma) were constructed and the effect of virus-encoded IFN-gamma on the immune response towards VV in vivo investigated. In athymic nude mice and sublethally irradiated euthymic mice, IFN-gamma expression by VV enabled the mice to recover from the infection, whereas mice infected with the control virus died. In normal CBA/H mice also, the growth of VV was greatly reduced and it was cleared faster from mouse organs than the control virus. Natural killer (NK) cell responses in these mice were not enhanced suggesting that this recovery is not NK cell mediated. Other possible mechanisms and implications of this observation are discussed.