Murine peritoneal exudate macrophages (PEM) can be induced by colony-stimulating factor (CSF-1) to undergo extensive proliferation and colony formation in vitro. In the presence of interferon alpha + beta (IFN alpha + beta) the proliferative capacity of PEM was greatly suppressed in a dose-dependent manner. The antiproliferative activity of IFN alpha + beta appears to be noncytocidal and reversible at low concentrations. At higher concentrations, exposure to IFN alpha + beta was sufficient to cause growth inhibition in PEM. Tissue-derived PEM were at least 25-fold more sensitive than bone marrow GM-CFC to the antiproliferative activity of IFN alpha + beta. The fact that bone marrow-derived adherent cells also exhibited a higher degree of sensitivity than the less differentiated nonadherent counterparts suggests that the primary targets of IFN alpha + beta are cells derived from a later stage of development. Concomitantly with the loss of proliferative activity, both the tumoricidal and Fc receptor-mediated phagocytic activities in IFN alpha + beta treated PEM were greatly enhanced. These effects could be completely neutralized by the addition of anti-IFN alpha + beta immunoglobulin, indicating that they are mediated by the same molecule. This remarkable dichotomy in the actions of IFN alpha + beta (stimulates functional activities but suppresses proliferative capacity) suggests that IFN alpha + beta may play a role in the regulation of macrophage production and function.