IFNγ exerts multiple biological effects on effector cells by regulating many downstream genes, including smooth muscle-specific genes. However, the molecular mechanisms underlying IFNγ-induced inhibition of smooth muscle-specific gene expression remain unclear. In this study, we have shown that serum response factor (SRF), a common transcriptional factor important in cell proliferation, migration, and differentiation, is targeted by IFNγ in a STAT1-dependent manner. We show that the molecular mechanism by which IFNγ regulates SRF is via activation of the 2-5A-RNase L system, which triggers SRF mRNA decay and reduced SRF expression. As a result, decreased SRF expression reduces expression of SRF target genes such as smooth muscle α-actin and smooth muscle myosin heavy chain. Additionally, IFNγ reduced p300 and acetylated histone-3 binding in both smooth muscle α-actin and SRF promoters, epigenetically decreasing smooth muscle α-actin and SRF transcriptional activation. Our data reveal that SRF is a novel IFNγ-regulated gene and further elucidate the molecular pathway between IFNγ, IFNγ-regulated genes, and SRF and its target genes.