The mechanism of induction of murine macrophage Ia expression by lipopolysaccharide (LPS) was studied. Intraperitoneal injection of 1 microgram of LPS resulted in a 3- to 10-fold increase in the number of IA-positive peritoneal macrophages (flow cytometry and immunofluorescence and a 6-to 16-fold increase by radioimmunoassay. The isolated lipid A moiety of LPS was a potent inducer of macrophage Ia expression. Ia induction required a functional myelopoietic system as indicated by the finding that the response to LPS was eliminated in irradiated (900 rads) mice and reinstated by reconstitution with bone marrow cells. Comparison of LPS-induced Ia expression in normal and LPS-primed mice revealed a faster secondary response to LPS. The memory response could be adoptively transferred to normal mice with nonadherent spleen cells prepared 60 days after LPS injection. Spleen cells prepared 5 days after LPS injection caused Ia induction in LPS-nonresponder mice; such induction was not observed in irradiated (900 rads) recipients. The cell responsible for this phenomenon was identified as a Thy-1+, immunoglobulin-negative nonadherent cell. The biosynthesis and expression of Ia were not increased by direct exposure of macrophages to LPS in vitro. Small amounts of LPS inhibited Ia induction by gamma interferon. LPS showed positive regulatory effects on Ia expression by delaying the loss of Ia expression on cultured macrophages and by stimulating the production of Ia-inducing factors. Supernatants from cultured spleen cells stimulated with LPS in vitro contained antiviral and Ia-inducing activity that was acid labile, indicating that the active factor is gamma interferon. We conclude that induction of Ia expression by LPS in vivo is a bone-marrow-dependent, radiation-sensitive process which involves the stimulation of a gamma interferon-producing accessory lymphocyte and a delay in Ia turnover.