Ectromelia virus (ECTV), a natural mouse pathogen and the causative agent of mousepox, is closely related to variola virus (VARV), which causes smallpox in humans. Mousepox is an excellent surrogate small-animal model for smallpox. Both ECTV and VARV encode a multitude of host response modifiers that target components of the immune system and that are thought to contribute to the high mortality rates associated with infection. Like VARV, ECTV encodes a protein homologous to the ectodomain of the host gamma interferon (IFN-gamma) receptor 1. We generated an IFN-gamma binding protein (IFN-gammabp) deletion mutant of ECTV to study the role of viral IFN-gammabp (vIFN-gammabp) in host-virus interaction and also to elucidate the contribution of this molecule to the outcome of infection. Our data show that the absence of vIFN-gammabp does not affect virus replication per se but does have a profound effect on virus replication and pathogenesis in mice. BALB/c mice, which are normally susceptible to infection with ECTV, were able to control replication of the mutant virus and survive infection. Absence of vIFN-gammabp from ECTV allowed the generation of an effective host immune response that was otherwise diminished by this viral protein. Mice infected with a vIFN-gammabp deletion mutant virus, designated ECTV-IFN-gammabp(Delta), produced increased levels of IFN-gamma and generated robust cell-mediated and antibody responses. Using several strains of mice that exhibit differential degrees of resistance to mousepox, we show that recovery or death from ECTV infection is determined by a balance between the host's ability to produce IFN-gamma and the virus' ability to dampen its effects.