Two H-2 negative variants of the YAC-1 lymphoma were selected by mutagenization and sequential in vitro selections and compared with wild-type cells for changes in NK sensitivity and H-2 expression after interferon treatment or in vivo passage. The H-2 negative variants and the low H-2 expressor YAC-1 wild-type cells had similar NK sensitivity. However, IFN-beta or recombinant IFN-gamma pretreatments increased the H-2 expression of YAC-1 and protected them from NK lysis, whereas the H-2 variants, which remained H-2 negative, were not protected and often more sensitive to NK lysis. The H-2 variants were similarly susceptible as wild-type cells to three other cellular effects of interferon: protection from virus infection, modulation of Con A capping, and inhibition of cell proliferation. Thus, the only interferon-mediated effect that distinguished the H-2 negative variants from wild-type cells was the inability of the former to increase their H-2 expression and decrease their NK sensitivity. The wild-type YAC-1 line showed increased H-2 expression and decreased NK sensitivity after in vivo passage. In contrast, in vivo passaged H-2 variants showed no reexpression of H-2, and remained NK sensitive. The altered responses to interferon and in vivo passage were specific for loss or down-regulation of H-2, because Thy-1 loss (H-2 positive) YAC-1 variants behaved as the wild-type cells in all respects. This study supports the hypothesis that NK cells may function in vivo to eliminate host cells that fail to express H-2 after interferon stimulation during an immune response; such cells are a potential threat because they may escape recognition by T lymphocytes despite the expression of viral or tumor-associated antigens.