The in vitro effect of physiological levels of hydrocortisone (HC) on NK activity of human lymphocytes was investigated. Lymphocytes incubated with HC 20-80 micrograms/dl (200-800 ng/ml) prior to NK assay showed depressed NK activity similar to that previously reported at higher doses. The responsiveness of NK cells to augmentation by alpha and gamma interferon was also appreciably depressed by HC. Inhibition of cytotoxicity was not due to a toxic effect of the drug since the viability of the effector cells after incubation was comparable to control cells. Indomethacin was able to partially reverse hydrocortisone suppression in 7 out of 12 experiments. Results of these in vitro studies demonstrate that hydrocortisone, when used at the levels found in humans treated with interferon, could have significant immunomodulatory effects that would be expected to alter the immunostimulation induced by the interferons.