The p38 mitogen-activated protein (MAP) kinase is activated during engagement of the type I interferon (IFN) receptor and mediates signals essential for IFNalpha-dependent transcriptional activation via interferon-stimulated response elements without affecting formation of the ISGF3 complex. In the present study, we provide evidence that the small GTPase Rac1 is activated in a type I IFN-dependent manner and that its function is required for downstream engagement of the p38 MAP kinase pathway. We also demonstrate that p38 is required for IFNalpha-dependent gene transcription via GAS elements and regulates activation of the promoter of the PML gene that mediates growth inhibitory responses. In studies to determine whether the regulatory effects of p38 are mediated by serine phosphorylation of Stat1 or Stat3, we found that the p38 kinase inhibitors SB203580 or SB202190 or overexpression of a dominant negative p38 mutant do not inhibit phosphorylation of Stat1 or Stat3 on Ser-727 in several IFNalpha-sensitive cell lines. Altogether these data demonstrate that the Rac1/p38 MAP kinase signaling cascade plays a critical role in type I IFN signaling, functioning in cooperation with the Stat-pathway, to regulate transcriptional regulation of IFNalpha-sensitive genes and generation of growth inhibitory responses.