An interferon (IFN)-stimulated gene (ISG) encodes a bovine 17-kDa protein (bISG17) that is released from endometrial cells but also conjugates to intracellular proteins through a ubiquitinlike mechanism. During early pregnancy in ruminants, conceptus-derived IFN-τ induces endometrial ISG17. The present experiments were designed to generate bioactive recombinant (r) bISG17. The Pichia pastoris yeast expression system was used because previous experiments expressing the human ISG15 ortholog in bacteria were confounded by inherent carboxypeptidase activity that cleaved C-terminal residues resulting in an inactive protein. In a series of extensive yeast culture experiments using shaker-bath and fermentation approaches, optimal conditions were determined for a transformant containing a multi-ISG17 gene insertion. Recombinant bISG17 was purified. Carboxy-terminal sequencing revealed that rbISG17 retained the C-terminal Gly that is potentially critical for the first step in covalent attachment to targeted intracellular proteins. The rISG17 induced (P < 0.0001) IFN-γ mRNA (reverse transcription–polymerase chain reaction) and release of IFN-γ protein (ELISA) by bovine peripheral blood mononuclear cells. The IFN-γ mRNA also was upregulated (P < 0.0001) in endometrium from pregnant (Day 18) when compared with nonpregnant (Days 14 and 18) cows. It is concluded that rbISG17 generated in a yeast expression system retains cytokine/hormonal activity. This is the first description coupling the biology of two distinct IFNs (γ and τ) through the intermediary ubiquitin homolog ISG17.