Exposure of cells to certain cytokines can alter how these same cells respond to later cues from other agents, such as extracellular matrix or growth factors. Interferon (IFN)-gamma pre-exposure inhibits the spreading of fibroblasts on fibronectin. Expression of the IFN-gamma-induced GTPase murine guanylate-binding protein-2 (mGBP-2) can phenocopy this inhibition and small interfering RNA knockdown of mGBP-2 prevents IFN-gamma-mediated inhibition of cell spreading. Either IFN-gamma treatment or mGBP-2 expression inhibits Rac activation during cell spreading. Rac is required for cell spreading. mGBP-2 also inhibits the activation of Akt during cell spreading on fibronectin. mGBP-2 is incorporated into a protein complex containing the catalytic subunit of phosphatidylinositol 3-kinase (PI3-K), p110. The association of mGBP-2 with p110 seems important for the inhibition of cell spreading because S52N mGBP-2, which does not incorporate into the protein complex with p110, is unable to inhibit cell spreading. PI3-K activation during cell spreading on fibronectin was inhibited in the presence of mGBP-2. Both IFN-gamma and mGBP-2 also inhibit cell spreading initiated by platelet-derived growth factor treatment, which is also accompanied by inhibition of Rac activation by mGBP-2. This is the first report of a novel mechanism by which IFN-gamma can alter how cells respond to subsequent extracellular signals, by the induction of mGBP-2.