The mRNA of the ubiquitin-like modifier FAT10 has been reported to be overexpressed in 90% of hepatocellular carcinoma (HCC) and in over 80% of colon, ovary and uterus carcinomas. Elevated FAT10 expression in malignancies was attributed to transcriptional upregulation upon the loss of p53. Moreover, FAT10 induced chromosome instability in long-term in vitro culture, which led to the hypothesis that FAT10 might be involved in carcinogenesis. In this study we show that interferon (IFN)-gamma and tumor necrosis factor (TNF)-alpha synergistically upregulated FAT10 expression in liver and colon cancer cells 10- to 100-fold. Real-time RT-PCR revealed that FAT10 mRNA was significantly overexpressed in 37 of 51 (72%) of human HCC samples and in 8 of 15 (53%) of human colon carcinomas. The FAT10 cDNA sequences in HCC samples were not mutated and intact FAT10 protein was detectable. FAT10 expression in both cancer tissues correlated with expression of the IFN-gamma- and TNF-alpha-dependent proteasome subunit LMP2 strongly suggesting that proinflammatory cytokines caused the joint overexpression of FAT10 and LMP2. NIH3T3 transformation assays revealed that FAT10 had no transforming capability. Taken together, FAT10 qualifies as a marker for an interferon response in HCC and colon carcinoma but is not significantly overexpressed in cancers lacking a proinflammatory environment.