The potential antiproliferative effects of interferon-alpha (IFN-alpha) in the treatment of hepatocellular carcinoma (HCC) are controversial, and the growth inhibitory mechanisms remain poorly understood. Therefore, the current study was designed to delineate the molecular mechanisms responsible for direct antiproliferative actions of IFN-alpha in HCC cells. IFN-alpha receptor expression and signal transduction were examined by RT-PCR, immunoprecipitation, Western analysis, and transient transactivation assays. Effects of IFN-alpha on cell growth and cell-cycle distribution were evaluated based on cell numbers and flow cytometry. Composition and activity of cyclin-dependent kinase complexes were determined by immunoblotting and histone-H1-kinase assays. Expression of IFN-alpha receptors was found in all 3 HCC cell lines. IFN-alpha binding initiated phosphorylation of Jak1 and Tyk2 kinases leading to Stat1/Stat2 activation, nuclear translocation, and transactivation of an ISRE-luciferase reporter gene construct. IFN-alpha treatment resulted in a time- and dose-dependent reduction of proliferation. Cell cycle analysis of G1-synchronized, IFN-alpha-treated HCC cells revealed a substantial delay in S-phase progression but no alteration of G1/S-phase transition or evidence of apoptotic cell death. Reflecting the time course of S-phase accumulation, cell cycle-dependent induction of Cyclin A and Cyclin B was impaired, resulting in reduced activity of Cdk2 and Cdc2 kinases. Furthermore, Cdc25C was selectively down-regulated. IFN-alpha treatment inhibits growth of HCC cells by specifically delaying S-phase progression, most likely because of inhibition of Cyclin A induction, resulting in decreased activity of the associated Cdk2 and Cdc2 kinases.