The cytokine gamma interferon (IFN-gamma) and the calcitropic steroid hormone 1,25-dihydroxyvitamin D (1,25D) are activators of macrophage immune function. In sarcoidosis, tuberculosis, and several granulomatoses, IFN-gamma induces 1,25D synthesis by macrophages and inhibits 1,25D induction of 24-hydroxylase, a key enzyme in 1,25D inactivation, causing high levels of 1,25D in serum and hypercalcemia. This study delineates IFN-gamma-1,25D cross talk in human monocytes-macrophages. Nuclear accumulation of Stat1 and vitamin D receptor (VDR) by IFN-gamma and 1,25D promotes protein-protein interactions between Stat1 and the DNA binding domain of the VDR. This prevents VDR-retinoid X receptor (RXR) binding to the vitamin D-responsive element, thus diverting the VDR from its normal genomic target on the 24-hydroxylase promoter and antagonizing 1,25D-VDR transactivation of this gene. In contrast, 1,25D enhances IFN-gamma action. Stat1-VDR interactions, by preventing Stat1 deactivation by tyrosine dephosphorylation, cooperate with IFN-gamma/Stat1-induced transcription. This novel 1,25D-IFN-gamma cross talk explains the pathogenesis of abnormal 1,25D homeostasis in granulomatous processes and provides new insights into 1,25D immunomodulatory properties.