Abstract Interferon-γ (IFN-γ) is an important immunomodulatory and pleiotropic cytokine produced, primarily, by activated T lymphocytes and natural killer (NK) cells. We have devised a nitric oxide (NO)-based bioassay for mouse IFN-γ using resident peritoneal exudate cells (PECs) from C57BL/6 mice. Comparison with three existing bioassays demonstrated that this assay was very sensitive and detected IFN-γ in the linear range of ∼0.03–0.25 U/ml. Other cytokines, e.g. interleukin (IL)-2, IL-4, IL-6, IFN-α/β and tumor necrosis factor-α (TNF-α), either alone or in combination with IFN-γ, did not greatly modulate NO levels produced by resident peritoneal exudate cells. The presence of exogenous NO 3 − and H 2O 2 did not interfere with the IFN-γ induced NO production and detection. We also showed that the effect of lipopolysaccharide (LPS), which may be present in samples, could be suppressed by the use of Polymyxin B in the bioassay. The high sensitivity of the bioassay permitted the detection of low amounts of IFN-γ in 1% mouse serum. In addition, this assay reproducibly detected bioactive IFN-γ amounts in supernatants of activated T cells. The increase in IFN-γ production by activated T cells in response to CD28 costimulation was ∼3-fold by this bioassay and ∼5-fold by ELISA. In summary, we have devised a simple, sensitive, inexpensive and high throughput method for the reproducible detection of bioactive IFN-γ.