Tumor growth enhances macrophage (Mphi) suppressor activity by causing Mphi to increase synthesis of inhibitory molecules such as prostaglandin E2 (PGE2) or decreasing their expression of up-regulatory molecules such as the class II MHC protein Ia. Although these tumor-induced changes are correlated, it is unknown whether tumor-bearing host (TBH) Ia- Mphi become more suppressive by increasing their PGE2 synthesis. To assess the role of PGE2 in tumor-induced Ia- Mphi-mediated suppression of CD4+ T-cell alloreactivity, unseparated (Ia+-enriched) or Ia+-depleted (Ia-) populations of murine normal host (NH) or TBH splenic Mphi were added to mixed lymphocyte reaction (MLR) cultures. NH or TBH Ia- Mphi were significantly more suppressive than their respective unseparated populations, and TBH Ia- Mphi were more suppressive than their NH counterparts. When PGE2 production was blocked with indomethacin, TBH Ia- Mphi-mediated suppression was reduced more than suppression mediated by all other Mphi populations. A PGE2-specific ELISA showed more PGE2 in Ia- Mphi-containing cultures than in those with whole Mphi and more in cultures containing TBH Ia- Mphi than in their NH counterparts. Because interferon-gamma (IFN-gamma) is a potent Mphi activation molecule that regulates both Ia expression and PGE2 Production, the effects of IFN-gamma on tumor-induced Ia- Mphi-mediated suppression were investigated. Exogenous IFN-gamma reduced suppression mediated by all Mphi populations except NH unseparated Mphi. IFN-gamma suppressed alloreactivity without Mphi or with NH unseparated Mphi. Suppression mediated by NH or TBH Ia-, and TBH unseparated Mphi was also reduced when Mphi were pre-incubated with IFN-gamma before their addition to MLR cultures. IFN-gamma addition did not block Ia- Mphi-mediated suppression by decreasing Mphi PGE2 production. In fact, IFN-gamma addition increased PGE2 production two-fold in MLR cultures. However, IFN-gamma partly reduced suppression mediated by exogenous PGE, added to Mphi-depleted cultures. Cytofluorometric analysis showed that IFN-gamma increased the percentage of Ia+ Mphi in NH and TBH Ia- Mphi populations. Blocking TNF-alpha activity with anti-TNF-alpha antibodies caused IFN-gamma to suppress alloreactivity in all Mphi-added cultures. Collectively, these data show that tumor-induced suppression mediated by Ia- Mphi is caused by increased PGE2 synthesis. IFN-gamma strongly reduces Ia- Mphi-mediated suppression by blocking PGE2-mediated suppression, enhancing Ia- Mphi production of the up-regulatory molecule TNF-alpha, and possibly by increasing the number of Ia+ Mphi. These effects of IFN-gamma on Ia- Mphi suggest that this cytokine increases immunity and Mphi-mediated cytotoxicity during cancer.