By culture of human melanoma Colo 38 cells in the presence of increasing concentrations of recombinant immune interferon (IFN-gamma), the clone RZ gamma-4G.1 resistant to the antiproliferative action of IFN-gamma (3 X 10(4) units/ml) was isolated. This clone was cultured for 6 weeks in the absence of IFN-gamma and was subsequently treated with increasing concentrations of IFN-gamma. Contrary to the response of its parental cell line, treatment of this clone with IFN-gamma did not significantly alter the rate of protein or DNA synthesis and did not markedly modulate the cell surface expression of HLA Class I antigens, of the high molecular weight melanoma associated antigen, and of a Mr 100,000 melanoma associated antigen. IFN-gamma caused an increase in the cell surface expression and in the shedding of HLA Class II antigens from IFN-gamma resistant cells. Four proteins with molecular weights of 32,000, 38,000, 46,000, and 50,000 were induced by IFN-gamma in the parental melanoma cells but not in the resistant clone. Both cell lines bound equivalent amounts of 125I-IFN-gamma to their surface, indicating that the lack of specific surface receptors was not the cause of insensitivity to IFN-gamma. These results indicate that at the cellular level IFN-gamma modulates the expression and shedding of HLA Class II antigens through different mechanisms to those responsible for the antiproliferative action, modulation of the cell surface expression of melanoma associated antigen and of HLA Class I antigens, and induction of new proteins in cultured melanoma cells. Since the success of therapy of malignant diseases with IFN-gamma depends on the extent of resistance of individual tumor cells, the present study may provide a better understanding of the biology of IFN-gamma insensitive tumor cells and particularly the malignant melanoma.