Retroviral vectors were used to introduce the gamma-interferon (IFN-gamma) gene into CMS-5 cells, a weakly immunogenic tumor of BALB/c origin. After selection in G418-containing medium, colonies were isolated, cloned, and expanded to cell lines. IFN-gamma secretion was assessed using a bioassay and enzyme-linked immunosorbent assay, and high (25 units/ml) and low (5 units/ml) IFN-gamma producers were isolated. Tumor growth was followed after intradermal injection, and spleen cells were isolated at different time points. IFN-gamma secretion by tumor cells abrogated their tumorigenicity and induced a persistent and specific antitumor immunity. In contrast to the normally observed cellular immunosuppression in unmodified CMS-5 tumor-bearing mice, IFN-gamma-producing tumors induced a long lasting state of T-cell immunity, as judged by rejection of a CMS-5 tumor challenge and persistence of specific cytotoxic activity in the spleen cell population. High levels of tumor-specific cytotoxic activity could also be detected if IFN-gamma-secreting tumor cells, but not unmodified CMS-5 cells, were used as targets at a time point when immunosuppression was usually seen. These studies highlight the potential advantages of localized IFN-gamma secretion to induce potent antitumor immune responses.