HIV infection remains a worldwide threat. HIV-1 transactivator protein Tat is one of the retroviral proteins identified as a key immunomodulator in AIDS pathogenesis. Although the primary function of Tat is to regulate HIV-1 replication in the infected cell, it also dysregulates cytokine production resulting in perturbation of the host immune response and enhancement of the retrovirus survival. Because interferon-gamma (IFNgamma) is a pleiotropic cytokine with potent antiviral and immunoregulatory effects, we investigated whether Tat interferes with the IFNgamma signal transduction in primary monocytes. We demonstrated that Tat impaired the IFNgamma-receptor signaling pathway at the level of STAT1 activation, possibly via Tat-dependent induction of suppressor of cytokine signaling-2 (SOCS-2) activity. We delineated the inhibitory role of SOCS-2 in IFNgamma signaling pathway by overexpression of exogenous SOCS-2 in HEK293 cell. The results showed that SOCS-2 suppressed the IFNgamma-activated STAT1 phosphorylation and consequent IFNgamma-regulated transcription of specific genes. To confirm the role of SOCS2 in the Tat-induced process, we demonstrated that SOCS-2 siRNA in human blood monocytes abrogated the Tat-dependent inhibition of IFNgamma signaling. Our data suggested a possible mechanism implicating the role of SOCS-2 in mediating HIV-1-induced immune evasion and dysregulation of IFNgamma signaling in primary human monocytes.