Tumor necrosis factor (TNF) is important in the pathogenesis of autoimmune diabetes. It has an important role in immunological and inflammatory processes, and has also been shown to induce apoptotic cell death. We have shown that TNF + IFNgamma induce islet cell death in vitro. TNF exists as a biologically active transmembrane molecule (tmTNF), which is then cleaved to form soluble TNF (sTNF). We reasoned that sTNF, which has been used in previous studies, may not represent TNF in its physiological form. We compared the contributions of caspase activation and nitric oxide production to beta cell death induced by either tmTNF or sTNF together with IFNgamma. CHO cells transfected with a mutated TNF were used as a source of tmTNF. Either sTNF or tmTNF, together with IFNgamma, induced caspase-dependent cell death of the NIT-1 insulinoma cell line, as measured by DNA fragmentation and a fluorogenic caspase 3 activation assay. TNF + IFNgamma did not induce caspase 3 activation in primary mouse islets. Instead, iNOS gene expression was induced and cell death which was partly NO-dependent occurred. We conclude that the role of TNF in the development of type 1 diabetes is likely to be the activation of gene expression and not apoptosis. It appears that both tmTNF and sTNF act by a similar mechanism to induce beta cell death.