Inflammation and impaired secretion by lacrimal and salivary glands are hallmarks of the autoimmune disease, Sjögren's Syndrome. These changes in the lacrimal gland promote dryness and inflammation of the ocular surface, causing pain, irritation and corneal damage. The changes that initiate and sustain autoimmune inflammation in the lacrimal gland are not well-established. Here we demonstrate that interferon-γ (IFN-γ) is significantly elevated in lacrimal gland and tears of the male NOD mouse, a model of autoimmune dacryoadenitis which exhibits many ocular characteristics of Sjögren's Syndrome, by 12 weeks of age early in lacrimal gland inflammation. Working either with primary cultured lacrimal gland acinar cells from BALB/c mice and/or rabbits, in vitro IFN-γ treatment for 48 hr decreased expression of Rab3D concurrent with increased expression of cathepsin S. Although total cellular cathepsin S activity was not commensurately increased, IFN-γ treated lacrimal gland acinar cells showed a significant increase in carbachol-stimulated secretion of cathepsin S similar to the lacrimal gland in disease. In vitro IFN-γ treatment did not increase the expression of most components of major histocompatibility complex (MHC) class II-mediated antigen presentation although antigen presentation was slightly but significantly stimulated in primary cultured lacrimal gland acinar cells. However, exposure of cultured human corneal epithelial cells to IFN-γ more robustly increased expression and activity of cathepsin S in parallel with increased expression and function of MHC class II-mediated antigen presentation. We propose that early elevations in IFN-γ contribute to specific features of ocular disease pathology in Sjögren's Syndrome.