LXR (liver X receptor) is a ligand-activated transcription factor and plays an important role in regulation of lipid homoeostasis and inflammation. Several studies indicate that LXR inhibits IFN-γ (interferon γ)-induced biological responses; however, the influence of LXR on IFN-γ expression has not been fully elucidated. In the present study, we investigated the effects of LXR activation on IFN-γ expression at different levels. At the molecular level, we surprisingly observed that LXR ligand (T0901317) induced macrophage and T-cell IFN-γ protein expression which was associated with increased mRNA and secreted protein levels in culture medium. In contrast, selective inhibition of LXRα and/or LXRβ expression by siRNA reduced IFN-γ expression. Promoter analysis defined the multiple LXREs (LXR-responsive elements) in the proximal region of the IFN-γ promoter. EMSAs and ChIP indicated that LXR activation enhanced the binding of LXR protein to these LXREs. In vivo, T0901317 increased wild-type mouse serum IFN-γ levels and IFN-γ expression in the lung and lymph nodes. Functionally, we observed that administration of T0901317 to wild-type mice increased rates of survival and being tumour-free, and inhibited tumour growth when the animals were inoculated with LLC1 carcinoma. In contrast, these protective effects were substantially attenuated in IFN-γ-knockout (IFN-γ−/−) mice, suggesting that the induction of IFN-γ production plays a critical role in T0901317-inhibited tumour growth. Taken together, the results of the present study show that IFN-γ is another molecular target of LXR activation, and it suggests a new mechanism by which LXR inhibits tumour growth.