Natural killer (NK) cells play an important role in host defense mechanisms against infection and neoplasia. Interferon-alpha (IFN-alpha) has been shown to activate NK cells and to augment their cytotoxic activity, albeit its role in the maturation pathway of NK cells has not been elucidated. The present study examined whether IFN-alpha activates the immature NK subset (Free cells) to become cytotoxic and also ascertained whether IFN-alpha uses the same pathway of activation as that mediated by interleukin-2 (IL-2). Incubation of sorted Free cells overnight with IFN-alpha resulted in augmentation of their cytotoxic function against NK sensitive target cells. The enhanced cytotoxic activity was not accompanied by a new recruitment of NK-target binder cells but by an increase in the frequency of killer cells in the conjugate fraction. Activation of the Free subset by IFN-alpha resulted in upregulation of CD69, CD11b, and CD2 surface expression and stimulated secretion of IFN-gamma. Unlike IL-2, IFN-alpha did not stimulate the Free cells to proliferate or secrete TNF-alpha and activation of cytotoxicity and modulation of surface antigens by IFN-alpha were independent of TNF-alpha. The failure of IFN-alpha to stimulate secretion and proliferation by Free cells appeared to be mediated by negative signals. This was corroborated in experiments demonstrating that when Free cells were cultured with both IFN-alpha and IL-2, a significant inhibition was observed for both the IL-2 dependent secretion of TNF-alpha and proliferation. These results demonstrate that IFN-alpha serves as both an activator and a regulator of NK function. Further, activation of the immature Free NK cells by IL-2 and IFN-alpha proceeds by TNF-alpha- dependent and independent pathways, respectively. The findings also support our contention that the mechanism of activation of the cytotoxic machinery of NK cells is not linked to the mechanism of activation of cytokine secretion and/or proliferation.