Daudi cells, a human lymphoblastoid line, are exceptionally sensitive to the growth inhibitory effects of interferon, 1 unit/ml being sufficient to inhibit cell growth. In addition, interferon treatment of these cells severely inhibits the incorporation of exogenous thymidine into DNA and causes cells to accumulate in the G1(G0) at the expense of the S phase of the cell cycle. The possible involvement of ppp(A2'p)nA(n = 2 to less than or equal to 4) in these effects has been investigated. No (less than 1 nM) ppp(A2'p)nA or (A2'p)nA or alternative products of the ppp(A2'p)nA synthetase [e.g. NAD (2'pA)2] were detected in interferon-treated cells. In addition no evidence was obtained for the occurrence of ppp(A2'p)nA-mediated ribosomal RNA cleavage in these cells even after several days of treatment with relatively high doses of interferon. A line of Daudi cells which is resistant to all three of the above effects of interferon was selected. The wild type and resistant lines were compared with respect to the ppp(A2'p)nA and interferon and double-stranded RNA (dsRNA)-mediated protein kinase systems. The resistant line was not receptor-negative as it responded to interferon by the production of elevated levels of the ppp(A2'p)nA synthetase similar to those observed in extracts from wild-type cells. There was no detectable difference between the lines in the levels of the (2'-5')phosphodiesterase responsible for the degradation of ppp(A2'p)nA. There was, however, about a twofold increase in the ppp(A2'p)nA-dependent endoribonuclease activity in response to interferon with extracts from the wild-type but not the resistant cells. In addition, although the dsRNA-dependent protein kinase activity increased in both types of cell there was a striking reduction in the level of protein phosphorylation in general in response to interferon with material from the wild-type but not the resistant cells.