The effect of purified, recombinant murine gamma interferon (IFN-gamma) on the regulation of macrophage proliferation induced by colony-stimulating factor 1 (CSF-1) was investigated. Although both hemopoietic stem cells (GM-CFC) and tissue-derived peritoneal exudate macrophages (PEM) proliferated in response to CSF-1, the more mature PEM were much more sensitive to an antiproliferative effect of IFN-gamma. The role of IFN-gamma receptor expression and its relationship to growth inhibition was examined. Bone marrow cells as a whole did not exhibit an appreciable amount of IFN-gamma receptor binding activity. Likewise, nonadherent (NA) cells derived from CSF-1-stimulated bone marrow cultures displayed low levels of IFN-gamma receptor binding activity. On the contrary, more mature adherent (AD) cells (monocytes/macrophages) from the same culture exhibited high levels of IFN-gamma receptor binding activity, which continued to increase with culture time. The elevated IFN-gamma binding activity is due to an increase in total receptor number rather than the binding affinity as judged by Scatchard analysis. Similar to the relationship between PEM and GM-CFC, more mature AD cells were also more susceptible to the inhibitory effect of IFN-gamma on CSF-1-induced proliferation than their less mature NA counterparts. The fact that the sensitivity to IFN-gamma correlated well with the expression of existing IFN-gamma receptors strongly suggests that the inhibitory effect is mediated through IFN-gamma receptors. This study shows that the expression of IFN-gamma receptors in mononuclear phagocytes may not only represent one of the phenotypic parameters acquired by the growing macrophages during the process of differentiation, but may play some role in controlling proliferation.