In a previous study, we reported that a single injection of cyclophosphamide (CTX) in tumor-bearing mice resulted in tumor eradication when the animals were subsequently injected with tumor-sensitized lymphocytes. Notably, CTX acted by inducing bystander effects on T cells, and the response to the combined CTX/adoptive immunotherapy regimen was inhibited in mice treated with antibodies to mouse interferon (IFN)–/β. In the present study, we have investigated whether CTX induced the expression of type I IFN, and we have characterized the CTX effects on the phenotype of T cells in normal mice. CTX injection resulted in an accumulation of type I IFN messenger RNA in the spleen of inoculated mice, at 24 to 48 hours, that was associated with IFN detection in the majority of the animals. CTX also enhanced the expression of the Ly-6C on spleen lymphocytes. This enhancement was inhibited in mice treated with anti–type I IFN antibodies. Moreover, CTX induced a long-lasting increase in in vivo lymphocyte proliferation and in the percentage of CD44^hiCD4⁺ and CD44^hiCD8⁺T lymphocytes. These results demonstrate that CTX is an inducer of type I IFN in vivo and enhances the number of T cells exhibiting the CD44^hi memory phenotype. Since type I IFN has been recently recognized as the important cytokine for the in vivo expansion and long-term survival of memory T cells, we suggest that induction of this cytokine may explain at least part of the immunomodulatory effects observed after CTX treatment. Finally, these findings provide a new rationale for combined treatments with CTX and adoptive immunotherapy in cancer patients.