Monocyte chemotactic protein-1 (MCP-1) recruits activated phagocytes to the site of tissue injury. Interferon-gamma (IFN-gamma) present in the microenvironment of glomerulus acts on mesangial cells to induce local production of MCP-1. The mechanism by which IFN-gamma stimulates expression of MCP-1 is not clear. We therefore examined the role of PI 3 kinase signaling in regulating the IFN-gamma-induced MCP-1 expression in mesangial cells. Blocking PI 3 kinase activity with Ly294002 attenuated IFN-gamma-induced MCP-1 protein and mRNA expression. IFN-gamma increased Akt kinase activity in a PI 3 kinase-dependent manner. Expression of dominant negative Akt kinase inhibited serine phosphorylation of STAT1alpha, without any effect on its tyrosine phosphorylation, and decreased IFN-gamma-induced expression of MCP-1. These data for the first time indicate a role for PI 3 kinase-dependent Akt kinase in MCP-1 expression. We have recently shown that along with Akt, PKCepsilon is a downstream target of PI 3 kinase in IFN-gamma signaling. Similar to dominant negative Akt kinase, dominant negative PKCepsilon also inhibited serine phosphorylation of STAT1alpha without any effect on tyrosine phosphorylation. Dominant negative PKCepsilon also abrogated MAPK activity, resulting in decrease in IFN-gamma-induced MCP-1 expression. Furthermore, Akt and PKCepsilon are present together in a signaling complex. IFN-gamma had no effect on this complex formation, but did increase PKCepsilon-associated Akt kinase activity. PKCepsilon did not regulate IFN-gamma-induced Akt kinase. Finally, expression of dominant negative Akt kinase blocked IFN-gamma-stimulated MAPK activation. These data provide the first evidence that PI 3 kinase-dependent Akt and PKCepsilon activation independently regulate MAPK activity and serine phosphorylation of STAT1alpha to increase expression of MCP-1.