Evidence is presented that upon stimulation with endotoxin (lipopolysaccharide, LPS), Kupffer cells, the body's largest pool of sessile macrophages, synthesize and liberate a factor whose immunological, cytotoxic and chemical properties are those described for tumor necrosis factor (TNF)-alpha. Hepatocytes and sinusoidal endothelial cells do not produce detectable amounts of this protein. Ten nanograms of LPS per ml medium are sufficient to stimulate a substantial release of this mediator. Recombinant interferon-gamma (rIFN gamma) per se is a poor inducer of TNF release. Costimulation with endotoxin and rIFN gamma shows only a slight increment in the release of this cytotoxic factor, relative to LPS alone. Exposure of Kupffer cells to the Ca2+ ionophore A23187 or to elicitors of the oxidative burst and superoxide production, e.g. zymosan or phorbol 12-myristate 13-acetate, stimulates only a fraction (20%) of the TNF release seen after endotoxin challenge. Prostaglandin E2, the synthesis of which is strongly enhanced after challenge of rat Kupffer cells with LPS, suppresses the release of TNF by these cells. This autoregulatory mechanism may explain the kinetics of TNF production by stimulated Kupffer cells. Dexamethasone is another important mediator capable of reducing the LPS-elicited TNF formation. An effect of the glucocorticoid hormone can still be provoked if it is added simultaneously with or shortly after LPS. This rapid action requires a mechanism that is different from the time-consuming one leading to the inhibition of prostaglandin synthesis in Kupffer cells.