We study a mechanism for producing intrinsic broken power-law gamma-ray spectra in compact sources. This is based on the principles of automatic photon quenching, according to which, gammarays are being absorbed on spontaneously produced soft photons, whenever the injected luminosity in gamma-rays lies above a certain critical value. We derive an analytical expression for the critical gamma-ray compactness in the case of power-law injection. For the case where automatic photon quenching is relevant, we calculate analytically the emergent steady-state gamma-ray spectra. We show that a spontaneously quenched power-law gamma-ray spectrum obtains a photon index 3√/2, where √ is the photon index of the power-law at injection. Thus, large spectral breaks of the gammaray photon spectrum, e.g. ƒ√>1, can be obtained by this mechanism. We also discuss additional features of this mechanism that can be tested observationally. Finally, we fit the multiwavelength spectrum of a newly discovered blazar (PKS 0447-439) by using such parameters, as to explain the break in the gamma-ray spectrum by means of spontaneous photon quenching.