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Differentiation of muscle cells is characterized morphologically by the acquisition of contractile filaments and characteristic shape changes, and on the molecular level by induction of the expression of several genes, including those for the muscle-specific alpha-actin isoforms. IFN-gamma is an inhibitor of proliferation for several cells, including vascular smooth muscle, and is also an inducer of differentiated properties for several hematopoietic cells. We have therefore investigated whether IFN-gamma affects the expression of alpha-smooth muscle actin in cultured arterial smooth muscle cells. Cells exposed to IFN-gamma show a reduction of alpha-smooth muscle actin-containing stress fibers, as detected by immunofluorescence. The effect was observed in all phases of the cell cycle, and was caused by a reduction of the synthesis of alpha-smooth muscle actin protein as revealed by two-dimensional electrophoretic analysis of actin isoforms. RNA hybridization using a cRNA probe that hybridizes to all actin mRNAs showed that IFN-gamma-treated cells have a reduced content of the 1.7- kb mRNA that codes for alpha-smooth muscle actin, and to a lesser extent, also of the 2.1-kb mRNA encoding the beta and gamma-cytoplasmic actins. The reduction of alpha-smooth muscle actin mRNA was confirmed using an alpha-smooth muscle actin-specific cRNA probe. The reduction of alpha-smooth muscle actin mRNA occurs within 12 h, and is dependent on protein synthesis, since cycloheximide treatment reversed the effect. The inhibition of this mRNA species was dose dependent, and detectable by RNA hybridization at a dose of 50 U/ml IFN-gamma. These results suggest that the differentiation of arterial smooth muscle cells is not necessarily coupled to an inhibition of cellular proliferation. Instead, IFN-gamma may regulate the expression of several genes that control both proliferation and expression of differentiation markers.