Bone marrow contains nonadherent low-density wheat germ agglutinin-positive (Fr3-WGA(+)) cells that release large amounts of NO and show natural suppressor activity if stimulated with activated T cells. We have assessed the involvement of CD40-derived signals in NO production and their cytokine requirements. Production of NO by Fr3-WGA(+) cells in co-culture with activated T cells is inhibited by a competing CD40 soluble fusion protein. Fr3-WGA(+) cells express the inducible NO synthase (iNOS) and release NO following CD40 plus IFN-gamma activation. Production of NO through CD40 is strictly dependent on endogenous TNF-alpha and / or IL-1alpha, since it is inhibited by neutralizing these cytokines or blocking the TNF receptor (p55). Both cytokines are transcribed when Fr3-WGA(+) cells are stimulated by CD40 signaling plus IFN-gamma, although TNF-alpha remains below detection limits in stimulated Fr3-WGA(+) cell cultures. Phenotypic studies combined with data on intracellular iNOS expression and cell sorting indicate that NO-producing cells are CD40, CD31 (ER-MP12), CD11b (Mac-1)low, ER-MP20 (Ly-6C) and Gr-1 (Ly-6G) positive, consistent with myeloid progenitors. The results point to early myeloid cells as an important cell source of NO once triggered by activated T cells through CD40 and IFN-gamma-derived signals, in a mechanism involving the production of TNF-alpha and / or IL-1alpha.