IFNγ is a cytokine with important roles in tissue homeostasis, immune and inflammatory responses and tumour immunosurveillance. Signalling by the IFNγ receptor activates the Janus kinase (JAK)–signal transducer and activator of transcription 1 (STAT1) pathway to induce the expression of classical interferon-stimulated genes that have key immune effector functions. This Review focuses on recent advances in our understanding of the transcriptional, chromatin-based and metabolic mechanisms that underlie IFNγ-mediated polarization of macrophages to an ‘M1-like’ state, which is characterized by increased pro-inflammatory activity and macrophage resistance to tolerogenic and anti-inflammatory factors. In addition, I describe the newly discovered effects of IFNγ on other leukocytes, vascular cells, adipose tissue cells, neurons and tumour cells that have important implications for autoimmunity, metabolic diseases, atherosclerosis, neurological diseases and immune checkpoint blockade cancer therapy.