AbstractInterferon-γ (IFNγ) is an important mediator of cellular immune responses, but high systemic levels of this cytokine are associated with immunopathology. IFNγ binds to its receptor (IFNγR) and to extracellular matrix (ECM) via four positively charged C-terminal amino acids (KRKR), the ECM-binding domain (EBD). Across evolution, IFNγ is not well conserved, but the EBD is highly conserved, suggesting a critical function. Here, we show that IFNγ lacking the EBD (IFNγ^ΔKRKR) does not bind to ECM but still binds to the IFNγR and retains bioactivity. Overexpression of IFNγ^ΔKRKR in tumors reduced local ECM binding, increased systemic levels and induced sickness behavior, weight loss and toxicity. To analyze the function of the EBD during infection, we generated IFNγ^ΔKRKR mice lacking the EBD by using CRISPR–Cas9. Infection with lymphocytic choriomeningitis virus resulted in higher systemic IFNγ^ΔKRKR levels, enhanced sickness behavior, weight loss and fatal toxicity. We conclude that local retention of IFNγ is a pivotal mechanism to protect the organism from systemic toxicity during prolonged immune stimulation.