The interferon-inducible double-stranded RNA protein kinase PKR controls protein synthesis through the phosphorylation of eukaryotic translation initiation factor (eIF)-2. In addition to its demonstrated role in translational control, several reports have suggested a transcriptional role for PKR. Here we report that PKR is involved in IFN-and dsRNA-signaling pathways by modulating the function of the signal transducer and activator of transcription STAT1. We also show that PKR associates with STAT1 in mouse and human cells. The association is not a kinase–substrate interaction since STAT1 phosphorylation is not modified by PKR in vitro or in vivo. In addition, the formation of the PKR–STAT1 complex is not dependent upon the enzymatic activity of PKR but does require the dsRNA-binding domain of PKR. Moreover, there is a concomitant decrease in PKR–STAT1 interaction and increase in STAT1 DNA binding in response to IFNs or dsRNA. These findings suggest that PKR plays an important role in IFN and dsRNA-signaling pathways by modulating the transcriptional function of STAT1.