PEG-IFN-.beta. conjugates, where a PEG moiety is covalently bound to Cys.sup.17 of human IFN-.beta., are produced by a process of site specific PEGylation with a thiol reactive PEGylating agent. A pharmaceutical composition and a method for treating infections, tumors and autoimmune and inflammatory diseases are also provided. The invention further relates to a method for the stepwise attachment of PEG moieties in series to a polypeptide, and more particularly to IFN-.beta..