Immune responses against intestinal microbiota contribute to the pathogenesis of inflammatory bowel diseases (IBD) and involve CD4(+) T cells, which are activated by major histocompatibility complex class II (MHCII) molecules on antigen-presenting cells (APCs). However, it is largely unexplored how inflammation-induced MHCII expression by intestinal epithelial cells (IEC) affects CD4(+) T cell-mediated immunity or tolerance induction in vivo. Here, we investigated how epithelial MHCII expression is induced and how a deficiency in inducible epithelial MHCII expression alters susceptibility to colitis and the outcome of colon-specific immune responses. Colitis was induced in mice that lacked inducible expression of MHCII molecules on all nonhematopoietic cells, or specifically on IECs, by continuous infection with Helicobacter hepaticus and administration of interleukin (IL)-10 receptor-blocking antibodies (anti-IL10R mAb). To assess the role of interferon (IFN)-γ in inducing epithelial MHCII expression, the T cell adoptive transfer model of colitis was used. Abrogation of MHCII expression by nonhematopoietic cells or IECs induces colitis associated with increased colonic frequencies of innate immune cells and expression of proinflammatory cytokines. CD4(+) T-helper type (Th)1 cells - but not group 3 innate lymphoid cells (ILCs) or Th17 cells - are elevated, resulting in an unfavourably altered ratio between CD4(+) T cells and forkhead box P3 (FoxP3)(+) regulatory T (Treg) cells. IFN-γ produced mainly by CD4(+) T cells is required to upregulate MHCII expression by IECs. These results suggest that, in addition to its proinflammatory roles, IFN-γ exerts a critical anti-inflammatory function in the intestine which protects against colitis by inducing MHCII expression on IECs. This may explain the failure of anti-IFN-γ treatment to induce remission in IBD patients, despite the association of elevated IFN-γ and IBD.