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During catabolic diseases such as sepsis, inflammation, and infection, a state of growth hormone (GH) resistance develops in liver. This has been attributed in part to increased production of the proinflammatory cytokine interleukin-1beta (IL-1beta). To determine how IL-1beta induces GH resistance, we studied the acid-labile subunit (ALS) gene whose hepatic transcription is increased by GH via the Janus kinase-signal transducer and activator of transcription (JAK-STAT) pathway. IL-1beta reduced the ability of GH to stimulate ALS mRNA in rat primary hepatocytes and ALS promoter activity in H4-II-E rat hepatoma cells. This inhibition was dependent on ALSGAS1, an element resembling a gamma-interferon activated sequence that mediates the transcriptional effects of GH. Inhibition by IL-1beta was also associated with a reduction of GH-dependent binding of STAT5 to this element after chronic (8 and 24 h), but not after acute treatment (15 min). Because these results indicated that the inhibition by IL-1beta was indirect, expression of the recently discovered suppressors of cytokine action (SOCS) was examined in liver cells. IL-1beta did not alter the expression of SOCS1, SOCS2, and CIS, indicating that they are not involved. In contrast, IL-1beta increased SOCS3 mRNA by 8-fold after 24 h of treatment, whereas GH had no effect. Forced expression of SOCS3 was just as effective as IL-1beta in reducing the GH induction of ALS promoter activity in H4-II-E rat hepatoma cells. Similar results were observed in primary rat hepatocytes. We conclude that the induction of SOCS3 by IL-1beta contributes to the development of GH resistance in liver, and represents a mechanism by which cytokines such as IL-1beta cross-talk with cytokines using the JAK-STAT pathway.