The spontaneous activity of natural killer (NK) cells against most solid tumor targets is low but can be increased by incubation with interleukin 2 (IL-2). This phenomenon, termed lymphokine-activated killer (LAK) activity, has been used in recent clinical trials against some pulmonary malignancies. We compared the LAK activity of blood and lung lymphocytes after activation with IL-2. Lung lymphocytes did not develop LAK activity despite demonstrating a significant increase in NK activity against K562 targets after incubation with IL-2. This functional difference correlated with a reduced expression of Leu-19, a marker present on virtually all LAK cells derived from peripheral blood, on lung NK cells. Because pulmonary macrophages (PM) are important regulators of NK function, we next investigated whether PM could be responsible for the functional and phenotypic differences noted. Measuring NK and LAK activity in parallel, we found that the addition of PM to IL-2-activated lymphocytes resulted in a preferential suppression of LAK activity and a loss of Leu-19 expression from IL-2-activated blood lymphocytes as well as a Leu-19+ T cell clone. We conclude that pulmonary NK cells are phenotypically and functionally different from peripheral blood NK cells and that this likely reflects local regulation, perhaps by PM.