Modulation of major histocompatibility complex (MHC) antigen by parenchymal cells and "passenger leukocytes" is a common feature of allograft rejection. To assess its significance we have examined the fate of antigen-presenting cell (APC)-depleted pancreatic islet allografts subsequent to increasing their expression of MHC antigens by in vitro exposure to the lymphokine interferon-gamma (gIFN). While most untreated grafts survived indefinitely, gIFN-exposed grafts were acutely rejected. Using in vitro islet cell-lymphocyte coculture assays, we attempted to dissect the underlying mechanism of enhanced islet cell immunogenicity resulting from gIFN treatment. We determined that gIFN exposure did not affect the capacity of islet cells to serve as APC for T lymphocytes, however islet cell exposure to gIFN was associated with enhanced vulnerability to allogeneic cytotoxic T lymphocyte (CTL) lysis in vitro by an CD5+ (OX-19+), CD8+ (OX-8+), CD4- (W3/25-), class I-restricted CTL. On the basis of these findings, we conclude that antigenic modulation can be a decisive factor in the survival of engrafted tissues by augmenting the interaction of the graft antigens with cytolytic effector T lymphocytes.