BK virus (BKV) is widely accepted to be the causative agent of polyomavirus nephropathy. In immunocompromised individuals, especially kidney transplant recipients, BKV can replicate in kidney epithelial cells, causing loss of renal function and eventual destruction of the graft. Advances in immunosuppressive therapies may be partially responsible for the increasing incidence of polyomavirus nephropathy among transplant recipients by more effectively eliminating components of the immune system, such as gamma interferon (IFN-gamma)-producing lymphocytes, that keep BKV infections at a subclinical level. In this study, we investigated the role of IFN-gamma in regulating lytic infection by BKV. Treatment with IFN-gamma inhibited the expression of the viral early protein large tumor antigen (TAg) and the late protein VP1 in a dose-dependent manner. We detected 1.6- and 12-fold reductions in TAg transcripts at 48 and 96 h postinfection, respectively, with 250 U/ml IFN-gamma, suggesting that IFN-gamma-mediated inhibition occurs at the level of transcription. Furthermore, IFN-gamma inhibited the level of viral progeny production as much as 50-fold at a multiplicity of infection (MOI) of 0.5 and 80-fold at an MOI of 0.1. The inhibitory effects of IFN-gamma were similar for three different strains of BKV examined. These results indicate an important role for IFN-gamma in regulating BKV lytic infection.