Several studies have demonstrated that the expression of Ia molecules by macrophages is not constitutive but can be enhanced by soluble factors from activated T cells. This induced expression of Ia appears to be causally important in certain accessory functions such as antigen presentation. While the phenomenon of Ia induction is clear, the mechanism by which this occurs has not been determined. Therefore, experiments were designed to investigate the molecular events leading to expression of the human Ia molecule, HLA-DR. To accomplish this, the human monocytoid cell line U 937, which does not express any detectable HLA-DR molecules were used. Utilizing a cDNA probe for the alpha chain of HLA-DR and total cellular RNA, it could be demonstrated that resting U 937 lacked detectable HLA-DR transcripts. Digestion of genomic DNA from U 937 with the isoschizomers Msp I and Hpa II followed by analysis of the restriction fragments on Southern blots demonstrated the HLA-DR alpha chain genes to be methylated. Addition of 5-azacytidine, an analogue of cytidine which causes hypomethylation of DNA to U 937 caused hypomethylation of HLA-DR alpha chain genes but did not, by itself, lend to the appearance of HLA-DR molecules or transcripts. However, treatment of U 937 with 5-azacytidine followed by addition of either culture fluids from activated T cells or human recombinant gamma interferon did lead to the rapid appearance of abundant, mature HLA-DR transcripts and surface HLA-DR molecules. The results of these studies provide the first demonstration that methylation plays a role in the expression of human Ir genes and that induced expression of Ia molecules by soluble factors from T cells, including gamma interferon, is accompanied by the rapid appearance of Ir gene transcripts.