We previously generated an animal model for the study of autoimmune diseases of the eye by targeting gamma interferon (gamma IFN) expression to the lens of transgenic mice. Here, we have studied the effect of constitutive lens expression of gamma IFN on eye development of these transgenic mice. By Day 18 of embryonic development, lens and retinal differentiation programs are completely disrupted; normal lens epithelia and fibers are replaced by balloon-like cells and retinal differentiation into inner and outer neuroblastic layers is already affected. The mRNA levels of gamma E- and/or gamma F-crystallin and MIP, markers of lens cell differentiation, are drastically reduced, while expression of ICSBP, a gamma IFN-inducible transcriptional factor, is induced in the alpha ACry-gamma IFN transgenic mouse eyes. Taken together, our results suggest that constitutive expression of gamma IFN and its induction and activation of gamma IFN-inducible transcriptional factors in the eye altered the developmental fate of cells destined to become lens fiber cells by altering the pattern of lens gene expression.