Interferon-gamma (IFN-γ) exhibits diverse biological activities, including control of cell growth and tumor suppression. Here, we report that the treatment of M12 cells, a human metastatic prostate cancer cell line, with IFN-γ, resulted in marked inhibition of cell proliferation and induced apoptosis. These effects were not seen with either IFN-α or IFN-β. M12 cells, like many other human cancer cells, contain constitutively activated signal transducer and activator of transcription 3 (STAT3). The basal levels of both Akt and ERK1/2 phosphorylation are also markedly elevated in M12 cells. Strikingly, IFN-γ-induced apoptosis and growth inhibition of M12 cells were associated with persistent suppression of the constitutive tyrosine-phosphorylated STAT3 (pY-STAT3). The IFN-γ-induced dephosphorylation of pY-STAT3, however, was inhibited when the mTOR pathway was specifically blocked by rapamycin. Inhibition of PI-3K with low-dose LY294002, or MAPK with PD98059 also suppressed the mTOR/p70 S6k pathway, and correlated with the blockage of IFN-γ-induced dephosphorylation of pY-STAT3. Simultaneously, treatment with LY294002, PD98059, or rapamycin abolished IFN-γ-induced apoptosis in M12 cells. The inhibition of the mTOR pathway, however, did not affect IFN-γ-induced activation of STAT1 pathway, and suppression of STAT1 expression by siRNA had no effect on IFN-γ-induced dephosphorylation of pY-STAT3. Taken together, these results demonstrate that an intact mTOR pathway is critical for IFN-γ-induced suppression of pY-STAT3 and apoptosis. Our study thus provides novel insights into the contributions of signaling pathways other than the classical JAK/STAT1 pathway in the anti-proliferative, proapoptotic actions of IFN-γ.