A sustained response to standard interferon therapy for chronic hepatitis C has been demonstrated in no more than 25% of patients. To improve interferon alfa (IFN-alpha) antiviral effect, a number of combination therapies with IFNs plus other drugs have been proposed for both relapser and nonresponder hepatitis C virus (HCV)-infected patients. Although the causes of IFN resistance in subsets of HCV-infected patients are unknown, both viral and host factors have been involved, including defects in IFN signal transduction and IFN-alpha/beta receptor down-regulation. Here, we report that nonsteroidal anti-inflammatory drugs (NSAIDs), which have been proposed for IFN-alpha combination therapy in nonresponders, potentiate IFN-alpha signaling. We found that, in the hepatoma cell lines, CCL13/Chang and HepG2, indomethacin, a selective cyclo-oxygenase 1 and 2 (COX-1 and COX-2) inhibitor, increases IFN-alpha stimulation of interferon-stimulated response element (ISRE)-dependent transcription in a dose-dependent manner. Interestingly, maximal potentiation was observed with suboptimal IFN-alpha concentrations. Indomethacin exerts its effects by synergizing with IFN-alpha in inducing STAT1 activation by phosphorylation, without affecting concurrent Jak1 phosphorylation. Our data indicate that blockade of arachidonic acid (AA) metabolism by indomethacin activates a signaling pathway that converges on STAT1 activation to potentiate IFN-alpha-dependent gene activation.