Astrocytes and microglia, the two immune-regulatory cells of the central nervous system (CNS), are activated by a variety of pathogens and cytokines to elicit rapid transcriptional responses. This program of activation is initiated by a set of intracellular signaling cascades that includes mitogen-activated protein kinase (MAPK), nuclear factor (NF) kappaB, and Janus kinase/signal transducers and activators of transcription (JAK/STAT) pathways. This study defines the critical role that NADPH oxidase(Phox)-derived reactive oxygen species (ROS) play in lipopolysaccharide (LPS)- and interferon (IFN)gamma-induced signaling cascades leading to gene expression in glial cells. Treatment of rat microglia and astrocytes with LPS and IFNgamma resulted in a rapid activation of Phox and the release of ROS followed by an induction of inducible nitric oxide synthase (iNOS) expression. iNOS induction was blocked by inhibitors of Phox, i.e., diphenylene iodonium chloride (DPI) and 4-(2-aminoethyl) benzenesulfonylfluoride (AEBSF), suggesting an involvement of ROS signaling in iNOS gene expression. Exogenous catalase but not superoxide dismutase suppressed the basal activity and completely blocked induced levels of NO/iNOS, suggesting that hydrogen peroxide is the ROS involved. Phox inhibitors and catalase also suppressed LPS/IFNgamma-induced expression of cytokines, i.e., interleukin (IL)-1, IL-6, and tumor necrosis factor (TNF)alpha and blocked LPS activation of MAP kinases (i.e., p38 MAPK, c-Jun N-terminal kinase and extracellular signal-regulated kinase), NFkappaB, and IFNgamma-induced STAT1 phosphorylation. A microglial cell line stably transfected with a mutant form of Phox subunit, i.e., p47(phox) W(193)R, and primary astrocytes derived from Phox-deficient mice showed attenuated ROS production and induction of iNOS in response to LPS/IFNgamma, further strengthening the notion that Phox-derived ROS are crucial for proinflammatory gene expression in glial cells.