Background: Antithymocyte globulins (ATG) are T cell-depleting antibodies used in solid organ transplantation for induction therapy in sensitized patients with a high risk of graft rejection. Previously described effects besides the depletion of T cells have suggested additional modes of action and identified further cellular targets. Methods: We examined the transcriptional changes arising in immune cells from human blood after ex vivo stimulation with ATG at the single-cell level to uncover additional mechanisms by which ATG regulates T cell activity and effector functions. Findings: Analysis of the paracrine factors present in the plasma of ATG-treated whole blood revealed high levels of chemokines and cytokines, including interferon-γ (IFN-γ). Furthermore, we identified an increase in the surface expression of the programmed death ligand 1 (PDL-1) on monocytes mediated by the released paracrine factors. In addition, we showed that this induction is dependent on the activation of JAK/STAT signaling via the binding of IFN-γ to interferon-γ receptor 1 (IFN-γR1). Lastly, we demonstrated that the modulation of the immune regulatory axis of programmed cell death protein 1 (PD1) on activated CD8+ T cells with PDL-1 found on monocytes mediated by ATG potently inhibits effector functions including the proliferation and granzyme B release of activated T cells. Interpretation: Together, our findings represent a novel mode of action by which ATG exerts its immunosuppressive effects.