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Reason for Performing Study: While immune modulators are used routinely in equine medicine, their mechanism of action is not always known., Objectives: To determine the effect of a commercial preparation of inactivated parapoxvirus ovis (Orf virus; PPVO) on cytokine gene expression by equine peripheral blood mononuclear cells (PBMC) both in vitro and in vivo., Methods: PBMC were prepared from 6 mixed-breed yearlings and cultured in vitro with PPVO with or without Concanavalin A (Con A) for 24 h. Effects on the expression of IFNalpha, IFNbeta IFNgamma, TNFalpha and IL-18 were analysed by real time quantitative PCR (RT-PCR). In addition, 12 yearling horses were treated with PPVO and whole blood RNA samples were prepared at regular intervals to assess effects on in vivo cytokine gene expression. Six of those yearlings were later treated with saline and served as treatment controls. Nine additional yearlings were injected intradermally with a single dose and their injection sites biopsied at 24 and 48 h for cytokine expression., Results: In vitro culture of PBMC with PPVO led to a significant increase in IFNalpha and IFNbeta gene expression compared to mock-stimulated cultures. In addition, expression of IFNgamma and TNFalpha was significantly higher in PBMC stimulated with PPVO and Con A, than those stimulated with Con A alone. No changes were observed in IL-18 gene expression in vitro. Treatment of horses with a 3-dose regimen of PPVO resulted in elevation of IFNgamma gene expression, which was detected 24 h after the first dose and declined thereafter. Intradermal inoculation led to increased expression of IFNgamma along with IFNbeta, IL-15 and IL-18., Conclusions: Together these results indicate that PPVO stimulated IFNgamma production both in vitro and in vivo. Increased cytokine expression could account for its immunomodulatory activity., Potential Relevance: The absence of adverse reactions and clear indications of increased expression of cytokine gene expression supports previous clinical uses for this immune modulator in those situations when increased expression of IFNgamma is warranted.