Interleukin 1beta (IL-1beta) suppresses the IL-6-dependent induction of type II acute-phase response genes, but the underlying mechanism for this suppression remains uncertain. Here we report that treatment of human hepatocullular carcinoma HepG2 cells with IL-1beta inhibited the IL-6-dependent binding of signal transducer and activator of transcription factor (STAT)1, but not that of STAT3, to the high-affinity serum-inducible element ('SIE'). Furthermore, IL-1beta selectively down-regulated the IL-6-induced tyrosine phosphorylation of STAT1 without affecting the level of STAT1 or tyrosine phosphorylation of STAT3. Kinase assays in vitro indicated that the inhibition of STAT1 phosphorylation by IL-1beta was not due to an upstream blockade of Janus kinase (JAK1 or JAK2) activation. However, pretreatment with the proteasome inhibitor MG132 under conditions that prevented the IL-1beta-dependent activation of the nuclear factor NF-kappaB also blocked the inhibitory effect of IL-1beta on IL-6-activated STAT1. In related experiments, the protein tyrosine phosphatase inhibitor Na(3)VO(4) also antagonized the inhibitory effect of IL-1beta on the activation of STAT1 by IL-6. Taken together, these findings indicate that, by using a proteasome-dependent mechanism, IL-1beta concomitantly induces NF-kappaB activation and dephosphorylates IL-6-activated STAT1; the latter might partly account for the inhibition by IL-1beta of the IL-6-dependent induction of type II acute-phase genes.