Abstract Type I IFN is produced upon infection and tissue damage and induces the expression of many IFN-stimulated genes (ISGs) that encode host-protective proteins. ISG15 is a ubiquitin-like molecule that can be conjugated to proteins but is also released from cells in a free form. Free, extracellular ISG15 is suggested to have an immune-regulatory role, based on disease phenotypes of ISG15-deficient humans and mice. However, the underlying mechanisms by which free ISG15 would act as a “cytokine” are unclear and much debated. We, in this study, demonstrate in a clinically relevant mouse model of therapeutic vaccination that free ISG15 is an alarmin that induces tissue alert, characterized by extracellular matrix remodeling, myeloid cell infiltration, and inflammation. Moreover, free ISG15 is a potent adjuvant for the CTL response. ISG15 produced at the vaccination site promoted the vaccine-specific CTL response by enhancing expansion, short-lived effector and effector/memory differentiation of CD8+ T cells. The function of free ISG15 as an extracellular ligand was demonstrated, because the equivalents in murine ISG15 of 2 aa recently implicated in binding of human ISG15 to LFA-1 in vitro were required for its adjuvant effect in vivo. Moreover, in further agreement with the in vitro findings on human cells, free ISG15 boosted the CTL response in vivo via NK cells in the absence of CD4+ T cell help. Thus, free ISG15 is part of a newly recognized innate route to promote the CTL response.