The inadequate ability of cancer cells to present antigen on the cell surface via MHC class I molecules is one mechanism by which tumor cells evade antitumor-associated antigen immunity. In many cases, such as in renal cell carcinoma (RCC), the lack of MHC class I antigen presentation can be attributed to the down-regulation of genes needed for antigen processing, such as the transporters associated with antigen processing (TAP)1 and TAP2, and the proteasomal components low molecular weight proteins (LMP)2 and LMP7. The TAP1 and LMP2 genes are transcribed from a shared bidirectional promoter containing an IFN response factor element that confers IFN-gamma inducibility. Here, we investigate the differential responsiveness to IFN-gamma of RCC cell lines, Caki-1 and Caki-2, which have been reported to have abnormally low expressions of TAP1 and LMP2. We now demonstrate that the Caki-2 cell line is defective in the IFN-gamma signaling pathway. The effects of IFN-gamma on TAP1 and LMP2 expression revealed a loss of up-regulation in Caki-2 cells, but not in Caki-1 cells. In vivo DNA footprinting shows a specific loss of occupancy at the IFN response factor element site in Caki-2 cells, whereas Caki-1 cells show full promoter occupancy. Furthermore, in vitro DNA-binding studies indicated that Caki-2 cells do not have IFN-regulatory factor 1- or signal transducer and activator of transcription 1 (Stat1)-binding activity after IFN-gamma stimulation. Examination of Stat1, Jak1, and Jak2 proteins demonstrated that the proteins were expressed, however, not phosphorylated, upon IFN-gamma treatment in Caki-2 cells. Also, this cell line expressed both IFN-gamma receptor chains. IFN-gamma inducibility could not be rescued by introduction of normal Jak1 and/or Jak2 proteins. However, overexpression of Jak1 did increase TAP1 and LMP2 expression independent of IFN-gamma, indicating that the Stat1 and IFN-regulatory factor 1 proteins present in Caki-2 can be activated. These findings suggest that the loss of TAP1 and LMP2 induction is a defect in the earliest steps of the IFN-gamma signaling pathway resulting in the inability of Caki-2 cells to up-regulate the MHC class I antigen-processing pathway. Because immunotherapy may be one of the most promising approaches for treating RCC, understanding the mechanisms by which these tumors circumvent cytokine signaling, thereby evading antitumor-specific-antigen immunity, would greatly aid the efficacy of such therapy.