Interferon (IFN) inhibits intestinal chloride secretion, in part via down-regulation of CFTR and Na,K ATPase activity and expression, but the proximal signaling events were unknown. We have shown that transforming growth factor alpha (TGF) inhibits calcium-activated chloride secretion, and effects of IFN in other systems are mediated via epidermal growth factor (EGF) family members. We tested whether IFN inhibits chloride secretion via EGF receptor activation. IFN increased tyrosine phosphorylation in T₈₄ cells at 24 h, including the EGF receptor. IFN also increased cell-associated proTGF, as well as free TGF in the bathing media. However, while IFN significantly inhibited carbachol-induced chloride secretion, neither neutralizing antibodies to TGF, nor an EGF receptor inhibitor (tyrphostin AG1478, 1µM) were able to reverse this inhibitory effect. AG1478 also failed to reverse IFN-induced tyrosine phosphorylation of the EGF receptor, but receptor phosphorylation was attenuated by both the neutralizing antibody to TGF and PP2, a Src kinase inhibitor. Moreover, PP2 reversed the inhibitory effect of IFN on chloride secretion. In total, our findings suggest an increase in functional TGF and activation of the EGF receptor in response to IFN. The release of TGF and intracellular Src activation likely combine to mediate EGFr phosphorylation, but only Src appears to contribute to the inhibition of transport. Nevertheless, since TGF plays a role in restitution and repair of the intestinal epithelium following injury, we speculate that these findings reflect a feedback loop whereby IFN modulates the extent of cytokine-induced intestinal damage.