Cholestatic patients suffer from high perioperative morbidity and mortality, but the pathophysiology is still unknown. Interferon γ (IFN-γ) may play a role during cholestasis. Therefore, bile duct ligation (BDL) was induced in IFN-γ α-chain receptor—deficient (IFN-γR1—/—) and wild-type (IFN-γR1+/+) mice. BDL elicited increased IFN-γ messenger RNA and protein levels in the liver. One week after BDL, IFN-γR1+/+ mice showed less severe jaundice and liver injury than IFN-γR1—/— mice, as reflected by lower bilirubin and liver enzyme levels. In accordance, livers of IFN-γR1+/+ mice displayed smaller areas of necrosis by two-thirds than IFN-γR1—/— mice on histopathologic examination (P < 0.05), whereas mitotic activity and proliferating cell nuclear antigen (PCNA) labeling index was more than twice as high in IFN-γR1+/+ mice (P < 0.05). Livers of IFN-γR1+/+ mice displayed higher rates of apoptosis as indicated by DNA fragmentation rate, the number of apoptotic bodies, and poly ADP-ribose polymerase (PARP) immunostaining. BDL was not associated with lethality in IFN-γR1+/+ mice; IFN-γR1—/— mice, however, died from 10 days onward and survival after 2 weeks was 62% (10 of 16). In conclusion, these data suggest that IFN-γ protects against liver injury during extrahepatic cholestasis by stimulation of apoptosis and subsequent proliferation of hepatocytes, leading to elegant removal of damaged hepatocytes, thus preventing necrosis and concomitant inflammatory responses. (HEPATOLOGY2002;36:1466–1477).