Dermatomyositis with anti-melanoma differentiation-associated gene 5 antibody (anti-MDA5 DM) is a rare autoimmune disease, often complicated by life-threatening, rapidly progressive interstitial lung disease. Additional manifestations of the disease include skin lesions, vascular abnormalities, joints and muscles pain. Despite its clinical significance, the pathogenesis of anti-MDA5 DM remains largely unknown. Currently, the disease is perceived as driven by type I interferon (IFN) whose expression is increased in most of the patients. Importantly, the regulation of IFN-γ is also altered in anti-MDA5 DM as evidenced by the presence of IFN-γ positive histiocytes in the lungs of patients, and the identification of autoantibodies that directly stimulate the production of IFN-γ by mononuclear cells. This review critically examines the pathogenesis of the disease, shedding light on recent findings that emphasize a potential role of IFN-γ. A novel conceptual framework is proposed, which integrates the molecular mechanisms altering IFN-γ regulation in anti-MDA5 DM with the known functional effects of IFN-γ on key tissues affected during the disease, such as the lungs, skin, and vessels. Understanding the precise role and relevance of IFN-γ in the pathogenesis of the disease will not only enhance the selection of available therapies for anti-MDA5 DM patients but also pave the way for the development of new therapeutic approaches targeting the altered molecular pathways.