Rabies virus P protein inhibits alpha interferon (IFN-alpha)- and IFN-gamma-stimulated Jak-STAT signaling by retaining phosphorylated STAT1 in the cytoplasm. Here, we show that P also blocks an intranuclear step that is the STAT1 binding to the DNA promoter of IFN-responsive genes. As P is a nucleocytoplasmic shuttling protein, we first investigated the effect of the cellular distribution of P on the localization of STAT1 and consequently on IFN signaling. We show that the localization of STAT1 is correlated with the localization of P: in cells expressing a nuclear form of P (the short P3 isoform or the complete P in the presence of the export inhibitor leptomycin B), STAT1 is nuclear, whereas in cells expressing a cytoplasmic form of P, STAT1 is cytoplasmic. However, the expression of nuclear forms of P inhibits the signaling of both IFN-gamma and IFN-alpha, demonstrating that the retention of STAT1 in the cytoplasm is not the only mechanism involved in the inhibition of IFN signaling. Electrophoretic mobility shift analysis indicates that P expression in the cell extracts of infected cells or in stable cell lines prevents IFN-induced DNA binding of STAT1. The loss of the DNA binding of STAT1 and ISGF3 was also observed when purified recombinant P or P3 was added to the extracts of IFN-gamma- or IFN-alpha-treated cells, indicating that P directly affects the DNA binding activity of STAT1. Then products of the rabies virus P gene are able to counteract IFN signaling by creating both cytoplasmic and nuclear blocks for STAT1.