Interferon-gamma (IFN-γ) is shown to play a major role in β-cell dysfunction in chronic pancreatitis (CP). However, the underlying mechanisms are to be elucidated. The present study was conducted to determine the role of IFN-γ subverting insulin gene expression in CP. Pancreatic tissues from control (n=15) and CP patients (n=30) were analyzed for nuclear localization of pancreatic and duodenal homeobox transcription factor (Pdx-1) after ascertaining their diabetic status. By immunofluorescence and western blot analysis, the influence of IFN-γ, anti-inflammatory cytokine (interleukin-10), and anti-IFN-γ agent epigallocatechin-3-gallate (EGCG) on nuclear localization of Pdx-1was examined in the islets isolated from resected normal pancreatic tissue. Nuclear localization of Pdx-1 was 20.25±2.19 in the islets of diabetic CP patients and 31.44±2.09 in nondiabetic CP patients as compared with controls (60.45±5.11) and the corresponding distribution of Pdx-1 protein in the nuclear compartment was also decreased. Exposure of normal islets to IFN-γ revealed decreased nuclear localization of Pdx-1. Pretreatment with polyphenolic compound EGCG restored the nuclear localization of Pdx-1. These results suggest that IFN-γ induced β-cell dysfunction is mediated through decreased nuclear localization of Pdx-1.