To assess the role of IFN-gamma in the in vivo regulation of Th subset differentiation by IL-12, schistosome egg-induced Th2 responses and granuloma formation were studied in IFN-gamma knock-out (gamma KO) mice in which the absence of endogenous IFN-gamma is assured. Rather than suppressing pathology and eosinophilia as observed in wild-type animals, exogenous IL-12 in egg-injected gamma KO mice exacerbated Th2-dependent granuloma formation while failing to reduce peak tissue eosinophilia. Similarly, instead of inhibiting its production, IL-12 caused a dramatic increase in serum IgE levels in gamma KO animals after egg injection. Although the suppressive effects of IL-12 on Th2 responses were blocked in the absence of IFN-gamma, lymphocyte proliferation and IL-2 production were enhanced, a phenomenon which may underlie the observed exacerbation of egg-induced pathology. These findings formally establish that IL-12 inhibits Th2 development indirectly in vivo through the stimulation of IFN-gamma synthesis. In contrast, its promotion of Th1-associated responses seems to be at least partly a result of the direct action of the cytokine.