XIAP-associated factor 1 (XAF1) is a novel tumor suppressor and interferon stimulated gene (ISG). Interferon beta (IFNbeta) exerts anti-proliferative effect and induces apoptosis through the Jak-Stat signaling cascade by the type I Interferon receptor (IFN-R), which initiates gene transcription of those biological effectors of IFNbeta. The aim of this study is to determine the effect of IFNbeta on XAF1 expression and the putative mechanisms mediated by the critical role of signal transducers and activators of transcription 1 (Stat1). Gene expression was detected by RT-PCR and Western blot analysis. The promoter activity of XAF1 was examined by luciferase reporter assay. The activity of interferon stimulated response element (ISRE) was assessed by electrophoretic mobility shift assay (EMSA) and quantitative chromatin immunoprecipitation assay (Q-ChIP). Results showed that IFNbeta stimulated XAF1 promoter activity in colon cancer cell line DLD1 in a time- and dose-dependent manner. A high affinity ISRE binding element (ISRE-XAF1) was located in -55 to -66 nt upstream of the first ATG site of XAF1 gene. Deletion of ISRE-XAF1 completely abrogated basal and IFNbeta-induced promoter activity. IFNbeta-induced XAF1 expression was mediated by Stat1 through the interaction with ISRE-XAF1. Knocking down of the Stat1 expression and blocking its phosphorylation decreased IFNbeta-induced XAF1 expression. Results suggested that induction of an immediate early response gene-XAF1 by IFNbeta was mediated by the transcription regulator Stat1 through the ISRE site within the promoter region of XAF1 gene in colon cancer.