IFN-gamma inhibits intestinal Cl(-) secretion, in part via downregulation of CFTR and Na(+)-K(+)-ATPase activity and expression, but the proximal signaling events were unknown. We have shown that transforming growth factor-alpha (TGF-alpha) inhibits calcium-activated Cl(-) secretion, and effects of IFN-gamma in other systems are mediated via EGF family members. We tested whether IFN-gamma inhibits Cl(-) secretion via EGF receptor (EGFr) activation. IFN-gamma increased tyrosine phosphorylation in T84 cells at 24 h, including the EGFr. IFN-gamma also increased cell-associated pro-TGF-alpha, as well as free TGF-alpha in the bathing media. However, whereas IFN-gamma significantly inhibited carbachol-induced Cl(-) secretion, neither neutralizing antibodies to TGF-alpha nor an EGFr inhibitor (1 microM tyrphostin AG 1478) were able to reverse this inhibitory effect. AG 1478 also failed to reverse IFN-gamma-induced tyrosine phosphorylation of the EGFr, but receptor phosphorylation was attenuated by both the neutralizing antibody to TGF-alpha and PP2, a Src kinase inhibitor. Moreover, PP2 reversed the inhibitory effect of IFN-gamma on Cl(-) secretion. In total, our findings suggest an increase in functional TGF-alpha and activation of the EGFr in response to IFN-gamma. The release of TGF-alpha and intracellular Src activation likely combine to mediate EGFr phosphorylation, but only Src appears to contribute to the inhibition of transport. Nevertheless, because TGF-alpha plays a role in restitution and repair of the intestinal epithelium after injury, we speculate that these findings reflect a feedback loop whereby IFN-gamma modulates the extent of cytokine-induced intestinal damage.