Amyloid enhancing factor (AEF) is believed to be a key agent that triggers the second (deposition) phase of amyloidogenesis. However, the target cells of AEF activation and their function after the activation have not yet been clearly identified. We found that peritoneal resident cells from amyloidotic mice contained very high AEF activity. With a simultaneous subcutaneous injection of 1.0 ml of the casein-adjuvant emulsion, an intravenous injection of 10,000 cells was consistently capable of inducing amyloidosis in a recipient mouse in 72 hours. After 2-hour cultures, the major AEF activity was found in the adherent cells (macrophages). An intravenous injection of 5 to 10 million of the live macrophages with the casein-adjuvant injection caused amyloid deposits in the recipient not only in the spleen and the liver but also in the lung (an extremely rare site of AA amyloid deposition). We have interpreted this finding to indicate that the injected AEF-loaded macrophages, while still residing in the lung and exposed to the blood stream, processed SAA to form amyloid. We further tested this postulate in an in vitro system. In a 4-day culture of the AEF-loaded macrophages in a medium containing SAA-rich mouse serum, small masses (less than 15 microns in diameter) of Congo red positive substance were observed scattered adjacent to or surrounded by the macrophages. The present observations lend strong credence to the conclusion that AEF-loaded macrophages are fully capable of processing SAA to AA and further to amyloid fibrils, and that they indeed play a role in the second phase of amyloidogenesis in vivo.