Highly purified human blood monocytes, isolated by continuous Percoll density gradients under endotoxin-free conditions, and mouse peritoneal exudate macrophages (PEM) were activated in vitro by the combination of muramyl dipeptide (MDP) and recombinant interferon-gamma (r-IFN-gamma) to become tumoricidal against their respective tumorigenic target cells. The activation of human monocytes or mouse PEM by free unencapsulated r-IFN-gamma and MDP was species specific: human r-IFN-gamma activated human blood monocytes to lyse allogeneic melanoma cells, but did not activate mouse PEM. Mouse r-IFN-gamma activated mouse PEM to lyse syngeneic melanoma cells, but did not activate cytotoxic properties in human monocytes. The encapsulation of either mouse or human r-IFN-gamma with MDP within the same liposome preparation produced synergistic activation of cytotoxic properties in both PEM and monocytes without apparent species specificity. The activation of tumoricidal properties in macrophages by r-IFN-gamma and MDP occurred as a consequence of intracellular interaction. We base this conclusion on the data showing that whereas free r-IFN-gamma and MDP did not activate macrophages pretreated with pronase, liposome-encapsulated r-IFN-gamma and MDP did. Moreover, the i.v. injection of liposomes containing human or mouse r-IFN-gamma and MDP produced in vivo activation of mouse alveolar macrophages. These data suggest that in contrast to activation with free r-IFN-gamma, which requires binding to macrophage surface receptors, the intracellular interaction of r-IFN-gamma, which produces tumoricidal activity in macrophages, is not species specific.