Interferon (IFN) gamma, a cardinal proinflammatory cytokine, induces expression of the gene products of the class II locus of the major histocompatibility complex (MHC), whereas IFN-alpha or -beta suppresses MHC class II expression. The mechanism of IFN-beta-mediated MHC class II inhibition has been unclear. Recently, a novel factor termed class II transactivator (CIITA) has been identified as essential for IFN-gamma-induced MHC class II transcription. We studied the status of IFN-gamma-induced CIITA messenger RNA (mRNA) accumulation and CIITA-driven transactivation in IFN-beta-treated cells and used cell lines that had defined defects in the type I IFN response pathway to address the roles of IFN signaling components in the inhibition of MHC class II induction. IFN-beta treatment did not suppress IFN-gamma-induced accumulation of CIITA mRNA. After cells were stably transfected with CIITA, endogenous MHC class II genes were constitutively expressed, and MHC class II promoters, delivered by transfection, were actively transcribed in CIITA-expressing cells. Expression of these promoters was significantly impaired by pretreatment with IFN-beta. These results suggest that IFN-beta acts downstream of CIITA mRNA accumulation, and acts in part by reducing the functional competence of CIITA for transactivating MHC class II promoters. IFN stimulated gene factor 3 (ISGF3) gamma was essential for IFN-beta to mediate inhibition of MHC class II induction, regardless of whether MHC class II transcription was stimulated by IFN-gamma or directly by CIITA expression. Results of these experiments suggest that inhibition of MHC class II in IFN-beta-treated cells requires expression of gene(s) directed by the ISGF3-IFN-stimulated response element pathway, and that these gene product(s) may act by blocking CIITA-driven transcription of MHC class II promoters.