ISG15 is a ubiquitin-like protein that functions in innate immunity both as an intracellular protein modifier and as an extracellular signaling molecule that stimulates IFN-γ secretion. The extracellular function, important for resistance to mycobacterial disease, has remained biochemically uncharacterized. We have established an NK-92 cell-based assay for IFN-γ release, identified residues critical for ISG15 signaling, and identified the cell surface receptor as LFA-1 (CD11a/CD18; αLβ2 integrin). LFA-1 inhibition blocked IFN-γ secretion, splenocytes from CD11a^−/− mice did not respond to ISG15, and ISG15 bound directly to the αI domain of CD11a in vitro. ISG15 also enhanced secretion of IL-10, indicating a broader role for ISG15 in cytokine signaling. ISG15 engagement of LFA-1 led to the activation of SRC family kinases (SFKs) and SFK inhibition blocked cytokine secretion. These findings establish the molecular basis of the extracellular function of ISG15 and the initial outside-in signaling events that drive ISG15-dependent cytokine secretion.