IL-10, a cytokine produced by CD4+ T lymphocytes belonging to the Th-2 subset, has previously been shown to inhibit the synthesis of IFN-gamma by both T cells and NK cells. We now demonstrate that IL-10 can also down-regulate IFN-gamma-dependent immunity by blocking the ability of that lymphokine to activate macrophages. Thus, IL-10, in a dose-dependent manner, inhibits the microbicidal activity of IFN-gamma-treated inflammatory macrophages against intracellular Toxoplasma gondii as well as the extracellular killing of schistosomula of Schistosoma mansoni. This suppression correlates with the inhibition by IL-10 of IFN-gamma-induced production of toxic nitrogen oxide metabolites, an effector mechanism previously implicated in the killing by macrophages of both parasite targets. IL-10 inhibition of nitric oxide production was shown to occur when the cytokine is given before or together with the IFN-gamma-activating stimulus, but not after its removal from the cultures and to require 12 h of contact for maximal suppressive effect on macrophage function. These results, taken together with previous findings on the down-regulation of Th1 lymphokine production by IL-10, indicate that the induction of IL-10 may be an important strategy by which parasites evade IFN-gamma-dependent, cell-mediated immune destruction.