PKR, the interferon (IFN)-inducible protein kinase activated by double-stranded RNA, inhibits translation by phosphorylating the initiation factor eIF2alpha chain. Uniquely, human IFN-gamma mRNA uses local activation of PKR in the cell to control its own translation yield. IFN-gamma mRNA activates PKR through a structure in its 5'- region harboring a pseudoknot which is critical for PKR activation. Mutations that impair pseudoknot stability reduce the ability of IFN-gamma mRNA to activate PKR and strongly increase its translation efficiency. The cis-acting RNA element in IFN-gamma mRNA functions as a biological sensor of intracellular PKR levels. During an immune response, as IFN-gamma and other inflammatory cytokines build up in the cell's microenvironment, they act to induce higher levels of PKR in the cell, resulting in a more extensive activation of PKR by IFN-gamma mRNA. With the resulting phosphorylation of eIF2alpha, a negative feedback loop is created and the production of IFN-gamma is progressively attenuated. We propose that the therapeutic effect of IFN-beta in multiple sclerosis may rest, at least in part, on its exquisite ability to induce high levels of PKR in the cell and thereby to limit IFN-gamma mRNA translation through this negative feedback loop, blocking the excessive IFN-gamma gene expression that precedes clinical attacks.