Interferon gamma (IFN-γ) is a T helper cell type 1 (Th1) cytokine that plays important roles in almost all phases of immune and inflammatory responses. Although IFN-γ gene in large yellow croaker Larimichthys crocea has been reported, little is known about its bioactivity. In this study, large yellow croaker IFN-γ (LycIFN-γ) gene was found to be constitutively expressed in all tissues tested, with the highest levels in blood and heart. Based on stimulation with polyinosinic-polycytidylic acid [poly (I:C)] or inactivated trivalent bacterial vaccine, LycIFN-γ mRNA was significantly increased in spleen and head kidney tissues. LycIFN-γ transcripts were also detected in head kidney granulocytes, primary head kidney macrophages (PKM), head kidney leukocytes, and large yellow croaker head kidney cell line (LYCK), and were significantly up-regulated by poly(I:C) or lipopolysaccharide (LPS) in head kidney leukocytes. Recombinant LycIFN-γ protein (rLycIFN-γ) produced in Escherichia coli could enhance respiratory burst responses in PKM. Furthermore, rLycIFN-γ not only induced the expression of iNOS gene and release of NO, but also up-regulated the expression of proinflammatory cytokines TNF-α and IL-1β in PKM. These findings therefore indicated that LycIFN-γ has a role in mediating inflammatory response. In addition, rLycIFN-γ could significantly up-regulate expression of IFN-γ receptor CRFB13, signal transduction factor STAT1, transcription factors IRF1 and T-bet, and Th1-related cytokines IFN-γ and IL-2 in head kidney leukocytes, suggesting that LycIFN-γ may have the potential to promote Th1 immune response in large yellow croaker. Taken together, our results show that LycIFN-γ may be involved in inflammatory response and promote Th1 immune response as its mammalian counterpart.