Interferon-gamma (IFN gamma) is a cytokine that plays physiologically important roles in promoting innate and adaptive immune responses. The absence of IFN gamma production or cellular responsiveness in humans and experimental animals significantly predisposes the host to microbial infection, a result that validates the physiologic importance of this cytokine in preventing infectious disease. Recently, an additional role for IFN gamma in preventing development of primary and transplanted tumors has been identified. Although there now appears to be a consensus that IFN gamma promotes host responses to tumors, the mechanisms by which this cytokine achieves its effects remain unclear. In this review, we briefly discuss key issues of the molecular cell biology of IFN gamma and its receptor that are most relevant to IFN gamma-dependent anti-tumor effects and then focus on the data implicating IFN gamma as a critical immune system component that regulates tumor development. Potential mechanisms underlying IFN gamma's anti-tumor effects are discussed and a preliminary integrative model of IFN gamma's actions on tumors is proposed. Finally, the capacity of IFN gamma and lymphocytes to not only provide protection against tumor development but also to sculpt the immunogenic phenotype of tumors that develop in an immunocompetent host is presented and introduced as a "cancer immunoediting" process.