We hypothesized that fusing granulocyte-macrophage colony-stimulation factor (GMCSF) and interleukin (IL)-21 as a single bifunctional cytokine (hereafter GIFT-21) would lead to synergistic anticancer immune effects because of their respective roles in mediating inflammation. Mechanistic analysis of GIFT-21 found that it leads to IL-21Ralpha-dependent STAT3 hyperactivation while also contemporaneously behaving as a dominant-negative inhibitor of GMCSF-driven STAT5 activation. GIFT-21's aberrant interactions with its cognate receptors on macrophages resulted in production of 30-fold greater amounts of IL-6, TNF-alpha, and MCP-1 when compared to controls. Furthermore, GIFT-21 treatment of primary B and T lymphocytes leads to STAT1-dependent apoptosis of IL-21Ralpha(+) lymphocytes. B16 melanoma cells gene-enhanced to produce GIFT-21 were immune rejected by syngeneic C57Bl/6 mice comparable to the effect of IL-21 alone. However, a significant GIFT-21-driven survival advantage was seen when NOD-SCID mice were implanted with GIFT-21-secreting B16 cells, consistent with a meaningful role of macrophages in tumor rejection. Because GIFT-21 leads to apoptosis of IL-21Ralpha(+) lymphocytes, we tested its cytolytic effect on IL-21Ralpha(+) EL-4 lymphoma tumors implanted in C57Bl/6 mice and could demonstrate a significant increase in survival. These data indicate that GIFT-21 is a novel IL-21Ralpha agonist that co-opts IL-21Ralpha-dependent signaling in a manner permissive for targeted cancer immunotherapy.