The biological effects of tumor necrosis factor (TNF) include the enhancement of fibroblast proliferation, the secretion of collagenase and prostaglandin E2 (PGE2) by fibroblasts, and the resorption of bone and cartilage, suggesting a role for this cytokine in arthritic conditions. To investigate this, we measured the levels of TNF in synovial fluids and evaluated its secretion by synovial fluid mononuclear cells and tissues from patients with rheumatoid arthritis, osteoarthritis, and seronegative arthritis and normals. TNF was found to be secreted in all arthritic conditions but not in normals. The levels of TNF were highest in synovial fluid and correlated with interferon-gamma (IFN-gamma) levels but not PGE2. The production of TNF was stable in a single joint for 3 to 6 months. Using immunohistochemical staining, TNF was localized to mononuclear cells in the lining layer, sublining, and perivascular areas of synovial tissue. The secretion of TNF by rheumatoid synovial fluid mononuclear cells was inhibited by PGE2, while IFN-gamma enhanced its production in those cells which were spontaneously secreting TNF. Our data suggest that TNF may play a role in various arthritic diseases.