The effects of interferon (IFN) at the level of the target cell in the natural killer cytotoxic factors (NKCF) system have been examined to determine whether they correlate with the effects of IFN in natural killer (NK) cell-mediated cytotoxicity (CMC). NKCF are released into the supernatant of co-cultures of murine spleen cells and YAC-1 stimulator cells, and their lytic activity is measured against YAC-1 target cells. It was found that IFN-pretreated YAC-1 target cells were still sensitive to lysis by NKCF, although their ability to stimulate release of NKCF from murine spleen cells was impaired. This defect was not due to a lack of NK target structures, because IFN-pretreated YAC-1 cells form a normal number of conjugates with spleen cells. The defect also could not be attributed to an IFN-induced inhibition of protein synthesis, because emetine-pretreated YAC-1 stimulator cells can still induce the release of high levels of NKCF. Cellfree supernatants containing NKCF also contain low levels of endogenous IFN (10 to 50 U/ml). Although this concentration of IFN itself is not toxic to YAC-1 cells, it may still interact with NKCF and/or the target cell to enhance cytotoxicity mediated by NKCF. Evidence in support of this possibility is derived from experiments that demonstrated that addition of exogenous IFN to NKCF resulted in a synergistic enhancement of cytotoxicity. Taken together, these findings can account for the IFN-induced inhibition of target cell susceptibility to lysis in the NK CMC system. In addition, the evidence supports our model for the role of NKCF in the mechanism of NK CMC. According to this model, the effector cell must first bind to the target cell; then the target cell delivers a signal to the effector cell to activate the NKCF release mechanism. The effector cell releases NKCF that then bind to the target cell and mediate cell lysis. The mechanism by which IFN-pretreated target cells become relatively NK-resistant appears to be a defect in their ability to stimulate the effector cell to release NKCF after the initial effector-target cell binding.