Interferon gamma (IFN-gamma) responsiveness in certain cells depends on the state of cellular differentiation or activation. Here an in vitro developmental system was used to show that IFN-gamma produced during generation of the CD4+ T helper cell type 1 (TH1) subset extinguishes expression of the IFN-gamma receptor beta subunit, resulting in TH1 cells that are unresponsive to IFN-gamma. This beta chain loss also occurred in IFN-gamma-treated TH2 cells and thus represents a specific response of CD4+ T cells to IFN-gamma rather than a TH1-specific differentiation event. These results define a mechanism of cellular desensitization where a cytokine down-regulates expression of a receptor subunit required primarily for signaling and not ligand binding.