Tularemia is a zoonotic disease caused by the Gram-negative intracellular pathogen Francisella tularensis. These bacteria evade phagolysosomal fusion, escape from the phagosome and replicate in the host cell cytoplasm. IFNgamma has been shown to suppress the intra-macrophage growth of Francisella through both nitric oxide-dependent and -independent pathways. Since Francisella is known to subvert host immune responses, we hypothesized that this pathogen could interfere with IFNgamma signaling. Here, we report that infection with Francisella suppresses IFNgamma-induced STAT1 expression and phosphorylation in both human and murine mononuclear phagocytes. This suppressive effect of Francisella is independent of phagosomal escape or replication and is mediated by a heat-stable and constitutively expressed bacterial factor. An analysis of the molecular mechanism of STAT1 inhibition indicated that expression of SOCS3, an established negative regulator of IFNgamma signaling, is highly up-regulated during infection and suppresses STAT1 phosphorylation. Functional analyses revealed that this interference with IFNgamma signaling is accompanied by the suppression of IP-10 production and iNOS induction resulting in increased intracellular bacterial survival. Importantly, the suppressive effect on IFNgamma-mediated host cell protection is most effective when IFNgamma is added post infection, suggesting that the bacteria establish a permissive environment within the host cell.