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In most autoimmune diseases the serologic hallmarks of disease precede clinical pathology by years. Therefore, the use of animal models in defining early disease events becomes critical. We took advantage of a “designer” mouse with dysregulation of interferon gamma (IFNγ) characterized by prolonged and chronic expression of IFNγ through deletion of the IFNγ 3′-untranslated region adenylate uridylate-rich element (ARE). The ARE-Del-/- mice develop primary biliary cholangitis (PBC) with a female predominance that mimics human PBC that is characterized by up-regulation of total bile acids, spontaneous production of anti-mitochondrial antibodies, and portal duct inflammation. Transfer of CD4 T cells from ARE-Del-/- to B6/Rag1-/- mice induced moderate portal inflammation and parenchymal inflammation, and RNA sequencing of liver gene expression revealed that up-regulated genes potentially define early stages of cholangitis. Interestingly, up-regulated genes specifically overlap with the gene expression signature of biliary epithelial cells in PBC, implying that IFNγ may play a pathogenic role in biliary epithelial cells in the initiation stage of PBC. Moreover, differentially expressed genes in female mice have stronger type 1 and type 2 IFN signaling and lymphocyte-mediated immune responses and thus may drive the female bias of the disease. Conclusion: Changes in IFNγ expression are critical for the pathogenesis of PBC. (Hepatology 2016;64:1189-1201).