Background: The aim of the present work was to explore signal transduction pathways used in the regulation of S100A7 ( psoriasin). Members of the S100 gene family participate in many important cellular functions. Psoriasin, S100A8 ( calgranulin A) and S100A9 ( calgranulin B) are expressed in ductal carcinoma in situ ( DCIS), as well as in the hyperproliferative skin disease, psoriasis. In the latter condition, a disturbance in the STAT pathway has recently been reported. This pathway is implicated in the regulation of IFN-gamma, widely recognized as a key cytokine in psoriasis. IFN-gamma also exerts anti-tumor action in a number of tumor cell types, including breast cancer. We therefore examined the effect of IFN-gamma and STAT-signaling on the psoriasin expression. Methods: We established a TAC2 mouse mammary epithelial cell line with tetracycline-inducible psoriasin expression (Tet-Off). Viability in cell culture was estimated using MTS assay. Protein and gene expression were evaluated by Western blotting and quantitative real-time PCR. Statistical analyses were assessed using a one-tailed, paired t-test. Results: We report the downregulation of psoriasin by IFN-gamma in the MDA-MB-468 breast cancer cell line, as well as the downregulation of psoriasin induced by anoikis in cell lines derived from different epithelial tissues. In contrast, IFN-gamma had no suppressive effect on calgranulin A or calgranulin B. IFN-gamma is an important activator of the STAT1 pathway and we confirmed an active signaling pathway in the cell lines that responded to IFN-gamma treatment. In contrast, in the SUM190 breast carcinoma cell line, IFN-gamma did not suppress the expression of endogenous psoriasin. Moreover, a reduced phosphorylation of the STAT1 protein was observed. We showed that IFN-gamma treatment and the inhibition of the transcription factor NFkappaB had a synergistic effect on psoriasin levels. Finally, in TAC2 cells with tetracycline-induced psoriasin expression, we observed the increased viability of psoriasin-expressing cells after IFN-gamma treatment. Conclusion: Our data support the possibility that psoriasin expression is transcriptionally suppressed by IFN-gamma and that this effect is likely to be mediated by the activation of the STAT1 signaling pathway. The increased viability of psoriasin-expressing cells after IFN-gamma exposure suggests that psoriasin expression leads to the development of an apoptosis-resistant phenotype.