Culture of mesenteric lymph node cells from rats infected with Nippostrongylus brasiliensis resulted in the release of a soluble factor (IgE-binding factor) that can inhibit rosette formation of Fc epsilon R(+) lymphocytes with IgE-coated red cells. The factor is specifically absorbed with IgE-coated Sepharose. It has a m.w. of between 10,000 and 20,000. The major source of IgE-binding factor appears to be Fc epsilon R(+) T cells. The formation of IgE-binding factor by the lymphocytes was enhanced by IgE added to the culture medium. Evidence was obtained that Fc epsilon R(+) cells are involved in the induction of IgE-induced factor formation. Normal rat lymphocytes cultured alone failed to release IgE-binding factor, but incubation of normal lymphocytes with rat IgE resulted in the formation of IgE-binding factor and an increase in the proportion of Fc epsilon R(+) cells. It was also found that normal T cells formed the soluble factor upon incubation with IgE. In the induction of factor formation by normal lymphocytes, Fc gamma R(+) cells are essential; an Fc gamma R-depleted fraction failed to form IgE-binding factor upon incubation with IgE. The results suggest that interaction of IgE with Fc epsilon R(+) T cells and Fc gamma R(+) T cells induces the formation of IgE-binding factor(s).