The tissue-fixed macrophage is a key cellular element in the initiation and regulation of inflammation. Understanding the regulation of macrophage activation may provide valuable clues to the mechanisms involved in both beneficial and deleterious effects of inflammation. The lymphokine interferon-gamma (IFN-gamma) is capable of producing paradoxical immunoinflammatory effects. In the immunocompromised host it up-regulates a variety of immune functions and improves survival, but it is also capable of producing harmful effects by sensitizing immunocompetent animals to subclinical doses of endotoxin. These paradoxical effects suggest that the state of activation or priming of the host immune system is a key determinant of its response to endotoxemia. Because tumor necrosis factor (TNF) and procoagulant activity (PCA) elaboration by the tissue-fixed macrophage play a central role in the host response to endotoxin, we asked whether the paradoxical effects of IFN-gamma may be caused by priming of the macrophage for TNF and/or PCA production. In vitro, IFN-gamma produces a marked augmentation in TNF but does not alter PCA elaboration in response to endotoxin, demonstrating the selectivity of IFN-gamma priming of the macrophage. In vivo, IFN-gamma pretreatment followed by an established subclinical endotoxin exposure enhances toxicity while simultaneously increasing peak serum TNF levels. Exogenous priming by IFN-gamma alters the activation state of the macrophage and modifies the host response to endotoxin. Because this response is also dependent on the host's underlying immune state, IFN-gamma treatment in the immunocompetent host has the potential to produce deleterious effects by eliciting an exaggerated TNF response during endotoxemia.