Toxic shock syndrome (TSS) caused by the superantigen exotoxins of Staphylococcus aureus and Streptococcus pyogenes is characterized by robust T cell activation, profound elevation in systemic levels of multiple cytokines, including interferon-γ (IFN-γ), followed by multiple organ dysfunction and often death. As IFN-γ possesses pro- as well as anti-inflammatory properties, we delineated its role in the pathogenesis of TSS. Antibody-mediated in vivo neutralization of IFN-γ or targeted disruption of IFN-γ gene conferred significant protection from lethal TSS in HLA-DR3 transgenic mice. Following systemic high dose SEB challenge, whereas the HLA-DR3.IFN-γ+/+ mice became sick and succumbed to TSS, HLA-DR3.IFN-γ−/− mice appeared healthy and were significantly protected from SEB-induced lethality. SEB-induced systemic cytokine storm was significantly blunted in HLA-DR3.IFN-γ−/− transgenic mice. Serum concentrations of several cytokines (IL-4, IL-10, IL-12p40 and IL-17) and chemokines (KC, rantes, eotaxin and MCP-1) were significantly lower in HLA-DR3.IFN-γ−/− transgenic mice. However, SEB-induced T cell expansion in the spleens was unaffected and expansion of SEB-reactive TCR Vβ8+ CD4+ and CD8+ T cells was even more pronounced in HLA-DR3.IFN-γ−/− transgenic mice when compared to HLA-DR3.IFN-γ+/+ mice. A systematic histopathological examination of several vital organs revealed that both HLA-DR3.IFN-γ+/+ and HLA-DR3.IFN-γ−/− transgenic mice displayed comparable severe inflammatory changes in lungs, and liver during TSS. Remarkably, whereas the small intestines from HLA-DR3.IFN-γ+/+ transgenic mice displayed significant pathological changes during TSS, the architecture of small intestines in HLA-DR3.IFN-γ−/− transgenic mice was preserved. In concordance with these histopathological changes, the gut permeability to macromolecules was dramatically increased in HLA-DR3.IFN-γ+/+ but not HLA-DR3.IFN-γ−/− mice during TSS. Overall, IFN-γ seemed to play a lethal role in the immunopathogenesis of TSS by inflicting fatal small bowel pathology. Our study thus identifies the important role for IFN-γ in TSS.