We examined whether the macrophages in the liver, Kupffer cells, could be activated to a tumoricidal state in a similar way as has been described for other macrophage types. Kupffer cells were isolated by centrifugal elutriation of pronase-treated rat livers. Incubation with highly purified recombinant rat gamma-interferon in combination with small amounts of lipopolysaccharide or muramyldipeptide resulted in highly cytotoxic macrophages, as measured against P815 tumor cells in an 18 h 51Cr-release assay. Incubation of Kupffer cells with the stimulators entrapped within liposomes, caused phagocytosis of the liposomes and subsequent activation to tumor cytotoxicity, provided that both rat gamma-interferon and subthreshold doses of either lipopolysaccharide or muramyldipeptide were encapsulated. The minimum amount of liposomal rat gamma-interferon that induced optimal activation was 0.5 U/ml, while 6 ng/ml of liposomal lipopolysaccharide or muramyldipeptide was required. Cytotoxicity of Kupffer cells activated in this way, persisted for at least 48 h. Since liposomes in circulation are readily cleared by the liver macrophages, these findings may have therapeutic implications.