Interferon-gamma functions within the immune system as a potent anti-viral and immunoregulatory cytokine. In order to successfully replicate within a host cell, poxviruses have evolved a number of strategies to counteract the pleiotropic effects of interferon-gamma. In particular, the leporipoxvirus myxoma virus was shown to express an extracellular soluble interferon-gamma receptor homolog, denoted M-T7, which is capable of inhibiting the anti-viral activities of rabbit interferon-gamma (C. Upton, K. Mossman, and G. McFadden, 1992, Science 258, 1369-1372). Here, we demonstrate that expression of soluble interferon-gamma receptor homologs appears to be characteristic of all poxviruses tested, including Shope fibroma virus, vaccinia virus (strains WR and IHDW), ectromelia virus, cowpox virus, and rabbitpox virus. We have cloned, sequenced, and characterized the interferon-gamma binding protein in supernatants from ectromelia virus-infected cells, and demonstrate the capability of this soluble protein to bind human, murine, and rabbit interferon-gamma with similar affinity. We also investigate the properties of the vaccinia virus interferon-gamma binding protein and demonstrate that this protein binds human and rabbit interferon-gamma with similar affinity and binds murine interferon-gamma with a significantly lower relative affinity. The implications of these studies with respect to viral pathogenesis and the evolutionary relationship between a virus and its host are discussed.