IFN-alpha and skin-infiltrating activated T lymphocytes have important roles in the pathogenesis of psoriasis. T cells from psoriatic patients display an increased sensitivity to IFN-alpha, but the pathological mechanisms behind the hyperresponsiveness to IFN-alpha remained unknown. In this study, we show that psoriatic T cells display deficient expression of the suppressor of cytokine signaling (SOCS)3 in response to IFN-alpha and a low baseline expression of the SH2-domain-containing protein-tyrosine phosphatase (SHP)-1 when compared with skin T cells from nonpsoriatic donors. Moreover, IFN-alpha-stimulated psoriatic T cells show enhanced activation of JAKs (JAK1 and TYK2) and signal transducers and activators of transcription. Increased expression of SOCS3 proteins resulting from proteasomal blockade partially inhibits IFN-alpha response. Similarly, forced expression of SOCS3 and SHP-1 inhibits IFN-alpha signaling in psoriatic T cells. In conclusion, our data suggest that loss of regulatory control is involved in the aberrant hypersensitivity of psoriatic T cells to IFN-alpha.