Lipopolysaccharide (LPS) induces high levels of gamma interferon (IFN-gamma) in the circulation of mice pretreated with heat-killed Propionibacterium acnes. The following results were obtained in the present study. LPS, as well as interleukin-2 (IL-2), was also able to induce IFN-gamma in vitro in peritoneal exudate cells (PEC) from such mice. Splenocytes and lymph node cells from these mice or resident peritoneal cells from control mice produced trace or undetectable amount of IFN-gamma upon exposure to LPS. A synergistic effect on IFN-gamma induction was observed when LPS was added to a culture of PEC together with IL-2. Indomethacin augmented the induction of IFN-gamma by LPS or IL-2, and prostaglandin E2 reversed its effect. Deprivation of plastic-adherent or nylon wool-adherent cells abolished the induction by LPS or IL-2, whereas it did not affect that by concanavalin A. Culture supernatant of plastic-adherent cells incubated with LPS stimulated the nylon wool-nonadherent cells to produce IFN-gamma in the presence of IL-2, but interleukin-1 or phorbol myristic acetate did not replace the LPS-stimulated supernatant. The ability of PEC to produce IFN-gamma measured as a function of time after P. acnes injection increased in proportion to their natural killer (NK)-like activity against YAC-1 cells. Moreover, treatment of PEC with monoclonal anti-Thy-1 antibody or with anti-asialo GM1 antiserum plus complement eliminated the production of IFN-gamma and the NK-like activity simultaneously, whereas treatment with monoclonal anti-Lyt-2 antibody plus complement did not. These results suggest that IL-2 and some unidentified factor released from plastic-adherent cells by LPS stimulation cooperatively induce IFN-gamma production in activated, Thy-1- and asialo GM1-positive NK-like cells appearing in inflammatory reactions and that prostaglandin E2 regulates IFN-gamma production in these cells.