Human monocytes cultured on adherent IgG produce a specific IL-1 inhibitor that functions as a receptor antagonist (IL-1ra). This molecular has been purified, sequenced, cloned as a cDNA, and expressed in Escherichia coli. Recombinant IL-1ra has 17,000 mol wt and binds to IL-1 receptors on T lymphocytes, synovial cells, and chondrocytes with an affinity nearly equal to that of IL-1. These studies have examined some biological properties of purified recombinant human IL-1ra. This protein exhibits a dose-responsive inhibition of Il-1 alpha and Il-1 beta augmentation of PHA-induced murine thymocyte proliferation. The recombinant IL-1ra also blocks IL-1 alpha and IL-1 beta stimulation of PGE2 production in human synovial cells and rabbit articular chondrocytes, and of collagenase production by the synovial cells. A 50% inhibition of these IL-1-induced biological responses requires amounts of IL-1ra up to 100-fold in excess of the amounts of IL-1 alpha or IL-1 beta present. IL-1ra may play an important role in normal physiology or in pathophysiological states by functioning as a natural IL-1 receptor antagonist in the cell microenvironment.