IL-1 possesses several biologic properties, some of which are associated with chronic inflammatory diseases. We have recently shown that IL-1 induces its own gene expression and, in the present studies, we have examined the effect of IFN-gamma on IL-1-induced IL-1 production. Whereas IFN-gamma increases the total amount of IL-1 (extracellular and cell-associated) produced after endotoxin stimulation of human PBMC, in the same cultures, IL-1-induced IL-1 production was markedly (greater than 70%) reduced in the presence of IFN-gamma. We observed this inhibition in the PBMC from over 40 human donors by employing non-cross-reacting RIA for either IL-1 beta or IL-1 alpha. IFN-gamma inhibited IL-1 beta-induced IL-1 alpha as well as IL-1 alpha-induced IL-1 beta production; furthermore, this inhibitory effect of IFN-gamma was unaffected by indomethacin. The ability of 100 U/ml of IFN-gamma to inhibit IL-1-induced IL-1 production was comparable to that accomplished by 10(-7) M dexamethasone. In contrast to its effect on IL-1 production from PBMC, IFN-gamma had no effect on the proliferative responses of T cells to IL-1. We conclude that IFN-gamma down-regulates synthesis of total IL-1-induced IL-1 production but up-regulates endotoxin-induced IL-1 production. These studies may explain the ameliorating effects of IFN-gamma in experimental models of IL-1-induced bone and cartilage degradation, in peritoneal fibrosis, and in patients with diseases associated with increased IL-1 production.