Macrophages are centrally involved in the host immune response to infection with Trypanosoma brucei rhodesiense, a protozoan parasite responsible for human sleeping sickness in Africa. During trypanosome infections, the host is exposed to parasite-derived molecules that mediate macrophage activation, specifically GPI anchor substituents associated with the shed variant surface glycoprotein (VSG), plus the host-activating agent IFN-gamma, which is derived from activated T cells and is essential for resistance to trypanosomes. In this study, we demonstrate that the level and timing of exposure of macrophages to IFN-gamma vs GPI ultimately determine the macrophage response at the level of induced gene expression. Treatment of macrophages with IFN-gamma followed by GIP-sVSG (the soluble form of VSG containing the glycosylinositolphosphate substituent that is released by parasites) stimulated the induction of gene expression, including transcription of TNF-alpha, IL-6, GM-CSF, and IL-12p40. In contrast, treatment of macrophages with GIP-sVSG before IFN-gamma stimulation resulted in a marked reduction of IFN-gamma-induced responses, including transcription of inducible NO synthase and secretion of NO. Additional experiments revealed that the inhibitory activity of GIP-sVSG was associated with reduction in the level of STAT1 phosphorylation, an event required for IFN-gamma-induced macrophage activation. These results suggest that modulation of specific aspects of the IFN-gamma response may be one mechanism by which trypanosomes overcome host resistance during African trypanosomiasis.