The effect of human interferon alpha on the differentiation of functional populations of lymphocytes during the human allogeneic response in vitro was studied. Interferon alpha inhibited the generation of allospecific suppressor T lymphocytes that normally develop from lymphocytes primed in vitro against allogeneic cells. This effect was not the result of the destruction by interferon of precursor suppressor cells but rather to inhibition of their differentiation into active suppressor T lymphocytes. This inhibition was reversible and could be overcome by repeated allogeneic stimulation even in the presence of interferon. Inhibition of the generation of allospecific suppressor lymphocytes by interferon might play an important role in the allogeneic response. Interferon inhibited the proliferation of lymphocytes after allogeneic stimulation in a primary mixed lymphocyte reaction but enhanced their cytotoxicity. Despite the inhibitory effect in the primary mixed lymphocyte reaction, the specific secondary proliferative response of lymphocytes primed against a single HLA-DR antigen was only slightly affected by interferon. On the other hand, the nonspecific secondary proliferative response of lymphocytes primed in the presence of interferon was significantly reduced, indicating that interferon might decrease the recruitment of nonspecific "irrelevant" clones of responding cells during the sensitization period.