IL-10, originally described as a cytokine synthesis inhibitory factor, is secreted by a number of cells of the immune system, including monocytes and T cells. IL-10 is a potent inhibitor of monocyte/macrophage activation, and we have shown previously this cytokine to be a major endogenous down-regulator of TNF-alpha in the rheumatoid joint. The mechanisms involved in regulating IL-10 production by cells of the monocyte/macrophage lineage are not yet clear, and most studies to date have used an exogenous triggering signal such as LPS. In this study, we have investigated the effects of cell-cell contact between human peripheral blood-derived activated T cells and monocytes in regulating monocyte IL-10 production. T cells, prestimulated with anti-CD3 mAb or with phorbol 12,13 di-butyrate and ionomycin, were fixed with glutaraldehyde and then incubated with monocytes. Fixed prestimulated T cells induced monocytes to secrete both IL-10 and TNF-alpha, and in addition, enhanced LPS-stimulated monocyte production of IL-10 and TNF-alpha in a dose-dependent manner. Stimulation of monocyte IL-10 production was abrogated when T cells were separated physically from monocytes within the tissue culture well. Using neutralizing Abs, we show that T cell contact-mediated induction of monocyte IL-10 is partially dependent on endogenous TNF-alpha and IL-1. Furthermore, T cell membrane TNF-alpha was shown to be one of the contact-mediated signals regulating monocyte IL-10 production. Endogenous IL-10 was shown to down-regulate T cell contact-mediated monocyte TNF-alpha production. Collectively, our results demonstrate that an autoregulatory loop exists involving both secreted and membrane-associated forms of IL-10 and TNF-alpha, and suggest that T cell-monocyte cognate interaction may play an important role in the regulation of monocyte cytokine production.