During mammary tumorigenesis, there is a profound tumor-induced immunosuppression and a progressive thymic atrophy associated with tumor development. IFN-γ has been shown to be effective in enhancing antitumor responses in several tumor models, however, how IFN-γ exerts its anti-tumor effect is largely controversial. In the present study we have used a mammary tumor model to investigate whether the levels of IFN-γ have an important role in the tumor-induced immuno-suppression as well as in the pathogenesis of the thymic atrophy. We evaluated this possibility using DA-3 cells transfected to express IFN-γ (DA-3/IFN-γ), a system that provides constant, local production of IFN-γ within the tumor microenvironment. Overexpression of IFN-γ in the mammary tumor results in a marked delay of tumor growth, a reduction in regulatory T cells and myeloid-derived suppressor cells accumulation mostly due to down-regulation of chemokines implicated in the recruitment of immune regulatory cells, and a blockage in the tumor-associated thymus atrophy. Collectively, our data suggest that the replacement of the faulty levels of IFN-γ in the tumor results in a diminution of the tumor-induced immune suppression caused by the mammary tumor development.