The adjuvant effects of mycobacteria can be replaced by more chemically defined isolates of the cell walls including a water soluble fraction (WSA) and by the synthetic analog N-acetyl-muramyl-L-alanyl-D-isoglutamine (MDP), which is the minimal structure required for adjuvanticity. These compounds can directly activate macrophages as determined by an increase in spreading and adherence and by an elevated synthesis of the enzyme collagenase. Moreover, this increase in collagenase production is modulated by enhanced production of prostaglandins that influences intracellular levels of cyclic AMP. In addition, both MDP and WSA induced macrophages to produce a biologically active mediator that triggers quiescent fibroblasts into active proliferation. It thus appears that a mechanism for mycobacterial adjuvant action as determined with MDP and WSA is via activation of macrophages, which may then precipitate a multiplicity of other reactions resulting in enhanced immune phenomena. Furthermore, the granulomatous and fibrotic reactions associated with mycobacterial infection may be a consequence of this direct activation of macrophages.