Transgenic pathogenic microorganisms expressing host cytokines such as gamma interferon (IFN-gamma) have been shown to manipulate host-pathogen interaction, leading to immunomodulation and enhanced protection. Expression of host cytokines in malaria parasites offers the opportunity to investigate the potential of an immunomodulatory approach by generating immunopotentiated parasites. Using the primate malaria parasite Plasmodium knowlesi, we explored the conditions for expressing host cytokines in malaria parasites. P. knowlesi parasites transfected with DNA constructs for expressing rhesus monkey (Macaca mulatta) IFN-gamma under the control of the heterologous P. berghei apical membrane antigen 1 promoter, produced bioactive IFN-gamma in a developmentally regulated manner. IFN-gamma expression had no marked effect on in vitro parasite development. Bioactivity of the parasite-produced IFN-gamma was shown through inhibition of virus cytopathic effect and confirmed by using M. mulatta peripheral blood cells in vitro. These data indicate for the first time that it is feasible to generate malaria parasites expressing bioactive host immunomodulatory cytokines. Furthermore, cytokine-expressing malaria parasites offer the opportunity to analyze cytokine-mediated modulation of malaria during the blood and liver stages of the infection.