Reports on the status of DNA methylation of the IFN-gamma gene during T cell development in human and mouse have presented somewhat contradictory results. In this study we demonstrate in the mouse that methylation of the IFN-gamma promoter inhibits its transcriptional activity, and define a small hypomethylated region in T cells that correlates with transcription. The IFN-gamma promoter was also hypomethylated in NK cells, but not in B cells or nonhemopoietic tissues. Surprisingly, unlike the promoters of the IL-2 and IL-4 genes, the IFN-gamma promoter was hypomethylated in naive CD4(+) and CD8(+) T cells, and in this form from very early in T cell development. A population of non-B, non-T, non-NK cells containing the hypomethylated promoter was also found in the bone marrow. The hypomethylated state appears stable until peripheral CD4(+) T cells differentiate in response to Ag and APC. After T cell stimulation in vitro under Th2 conditions, but far less so under Th1 conditions, CD4(+) cells display a more methylated IFN-gamma promoter, which may contribute to the lack of expression of IFN-gamma in these preactivated cells. Our experiments support a new model of IFN-gamma chromatin structural changes in murine T cell development that differs from what has been previously published for human T cells.