Psoralens and ultraviolet light A (PUVA) are used in the treatment of a variety of epidermal proliferative and inflammatory disorders. These compounds are known to intercalate and photo crosslink DNA. Specific receptor proteins for psoralens have also been identified. We describe a novel activity of a thiol reactive derivative, iodomercurio-4',5'-dihydrotrimethylpsoralen (iodomercurio-H2TMP) in keratinocytes. Without UVA, this psoralen was found to be an effective inhibitor of interferon-gamma (IFN-gamma)-signaling as measured by induction of nitric oxide biosynthesis (IC50 = 0.8 microM). This activity was increased (IC50 = 0.1 microM) when the cells were depleted of intracellular glutathione (GSH) with buthionine sulfoximine. In keratinocytes, IFN-gamma stimulates expression of inducible nitric oxide synthase (NOS2). Although iodomercurio-H2TMP did not alter NOS2 enzymatic activity, it blocked IFN-gamma-induced expression of NOS2 mRNA and protein, an effect that was enhanced in GSH-depleted cells. Iodomercurio-H2TMP was found to readily inhibit IFN-gamma signaling in transient transfection assays using NOS2 promoter/luciferase reporter constructs. NOS2 gene expression is known to require a variety of transcription factors including STAT-1, NF-kappaB and AP-1. Using mobility shift assays the psoralen, at concentrations that inhibit nitric oxide biosynthesis, had no effect on the DNA binding activity of STAT-1 or NF-kappaB. However, iodomercurio-H2TMP was found to suppress AP-1. These data indicate that iodomercurio-H2TMP acts at sulfhydryl-sensitive sites to inhibit NOS2. Moreover, this is dependent on early events in the IFN-gamma signal transduction pathway. Inhibition of AP-1 suggests that the psoralen functions by interfering with an important transcription factor that regulates expression of NOS2 in keratinocytes.