Increased IFN-alpha signaling is a primary pathogenic factor in systemic lupus erythematosus (SLE). STAT4 is a transcription factor that is activated by IFN-alpha signaling, and genetic variation of STAT4 has been associated with risk of SLE and rheumatoid arthritis. We measured serum IFN-alpha activity and simultaneous IFN-alpha-induced gene expression in PBMC in a large SLE cohort. The risk variant of STAT4 (T allele; rs7574865) was simultaneously associated with both lower serum IFN-alpha activity and greater IFN-alpha-induced gene expression in PBMC in SLE patients in vivo. Regression analyses confirmed that the risk allele of STAT4 was associated with increased sensitivity to IFN-alpha signaling. The IFN regulatory factor 5 SLE risk genotype was associated with higher serum IFN-alpha activity; however, STAT4 showed dominant influence on the sensitivity of PBMC to serum IFN-alpha. These data provide biologic relevance for the risk variant of STAT4 in the IFN-alpha pathway in vivo.