Because synovial fluid monocytes (SFM) in patients with inflammatory arthritis bear an activated phenotype (i.e., high expression of HLA-DR and low expression of the monocyte differentiation antigen Mo2), we assessed the role of gamma-interferon (gamma-IFN) in the activation of these cells. Sensitive and specific radioimmunoassays detected only 0.40 +/- 0.20 units/ml of gamma-IFN in the SF of patients with rheumatoid arthritis (RA) and 0.61 +/- 0.67 units/ml of gamma-IFN in the SF of patients with other forms of chronic inflammatory arthritis. There was no detectable alpha-IFN in any SF studied by radioimmunoassay. Bioassays failed to detect nonimmunoreactive IFN. Synovial tissue (ST) explants produced very little gamma-IFN (0.14 +/- 0.091 units/ml), and production was not increased by the presence of indomethacin in the cultures or by removal of adherent cells. However, gamma-IFN was produced if ST was cultivated in the presence of phytohemagglutinin. In SF and ST supernatants, gamma-IFN-mediated induction of HLA-DR on monocytes was inhibited, even though the amount of immunoreactive IFN was not affected. Prostaglandin E2 was shown to be one possible inhibitor. We demonstrated that a factor that induces HLA-DR on some individuals' peripheral blood monocytes, and cannot be neutralized by monoclonal anti-gamma-IFN antibody, is present in SF and ST supernatants. These data suggest that activation of SFM may occur by mechanisms other than gamma-IFN.