Bleomycin-induced pulmonary fibrosis in hamsters is associated with collagen accumulation that results from increased lung collagen synthesis rates. However, 1-2 wk after intratracheal instillation of bleomycin, lung collagen synthesis rates decline toward control values. To evaluate the potential role of the bronchoalveolar macrophage in regulating lung collagen production, we studied the effects of macrophages from normal and bleomycin-treated hamsters upon fibroblasts in vitro. We observed: (a) Medium from macrophage cultures decreased fibroblast [3H]thymidine incorporation and nondialyzable [3H]hydroxyproline production in a dose-dependent manner. Fibroblast cell counts were decreased in exposed cultures, and fibroblast viability was unchanged. Procollagen prolyl hydroxylation and prolyl-transfer RNA-specific activity were not altered by macrophage medium; this indicates that [3H]hydroxyproline reflects collagen production rate under the experimental conditions. (b) The suppressive effect of macrophage medium was selective for collagen since collagen production decreased more than noncollagen protein production. (c) Medium from bleomycin-treated hamster macrophages suppressed fibroblast proliferation and collagen production to a greater degree than medium from normal hamster macrophages. (d) Fibroblast suppression by macrophage medium was associated with increased fibroblast endogenous prostaglandin E2 production and intracellular cyclic AMP (cAMP). (e) Incubation of fibroblasts with indomethacin before exposure completely inhibited prostaglandin E2 production and increases in cAMP, and eliminated suppression of fibroblast proliferation and collagen production. The macrophage-derived suppressive factor has an apparent molecular weight of 20,000-30,000 and is heat stable. It does not appear to be species restricted since both hamster and human lung fibroblasts are similarly suppressed. It is at least in part preformed in macrophages obtained by lavage, but its production can also be stimulated in vitro. We concluded that alveolar macrophages release a product that stimulates endogenous fibroblast prostaglandin E2 production and cAMP formation with resultant suppression of fibroblast proliferation and collagen production. Enhanced release of suppressive factor by macrophages during a time when lung collagen production is declining in bleomycin-induced pulmonary fibrosis suggests that macrophages may limit collagen accumulation in pulmonary fibrosis.