Previous work from our laboratory has shown that rabbit articular chondrocytes, like macrophages, produce reactive oxygen intermediates, express Ia antigen, and can mediate immunologic functions such as antigen presentation and induction of mixed and autologous lymphocyte reactions. We were interested in seeing if these cells could secrete interleukin-1 (IL-1) or express membrane form of IL-1 (mIL-1). Using the standard C3H/HeJ thymocyte assay, neither secreted IL-1 nor mIL-1 activity was detected in untreated or LPS-treated chondrocytes. However, the D10.G4.1 proliferation assay showed that chondrocytes, stimulated with LPS, secrete IL-1 and express the mIL-1 in a dose- and time-dependent manner. The IL-1 activity in LPS-stimulated chondrocyte supernatant and on fixed cells could be inhibited by anti-IL-1 antibodies. Sephadex G-75 chromatography of pooled, concentrated LPS culture supernatant resolved into two peaks of IL-1 activity at 13-17 and at 45-70 kDa, respectively. The bioactivity of chromatographic fractions were similar using both the thymocyte and D10.G4.1 bioassays. Western blot analysis of chondrocyte supernatant detects 17-kDa IL-1 beta; no processed 17-kDa IL-1 alpha was seen but IL-1 alpha-specific reactivity was observed at 64 kDa. Immunoblot analysis of chondrocyte lysates shows that cell-associated IL-1 is IL-1 alpha and is 37 kDa in size. PCR analysis shows the presence of mRNA for IL-1 beta and IL-1 alpha in LPS-treated cells; IL-1 beta mRNA was detected in untreated chondrocytes. The inability to detect IL-1 by the thymocyte assay is due to the presence of a chondrocyte inhibitor of IL-1 that can be demonstrated in cell sonicates, supernatants, and on paraformaldehyde-fixed chondrocytes. Chromatography of LPS-stimulated supernatant showed a peak of IL-1 inhibitory activity at 21-45 kDa. Chondrocytes which secrete IL-1 and express mIL-1 could play a critical role in maintaining chronic inflammation in rheumatoid arthritis. Therefore, the ability of chondrocytes to produce both IL-1 and an inhibitor to IL-1 is important in interpreting the mechanism of cartilage matrix maintenance and degradation.