Bacterial lipopolysaccharide (LPS) modulates expression of a variety of genes in macrophages, and additionally activates viral promoters including the HIV-1 LTR. The HIV-1 LTR driving the luciferase reporter gene was stably transfected into the murine macrophage cell line, RAW264. In stably transfected cells, luciferase activity was LPS-dependent. As little as 0.01 ng/ml LPS was sufficient to increase luciferase activity over basal levels with maximal stimulation resulting in a 10- to 20-fold response. The cells also responded to human and murine tumour necrosis factor (TNF alpha). Endogenous TNF alpha was not involved in LPS responses, since pretreatment with alpha-TNF alpha antibody did not affect activation. Induction of HIV-1 LTR activity by LPS occurred independently of phorbol myristate acetate (PMA) sensitive protein kinase C (PKC), since depletion of PKC by prolonged exposure to PMA blocked TNF alpha and PMA responses but was not able to abolish LPS action on these cells. Taxol (5-20 micrograms/ml), a chemotherapeutic agent which mimics LPS action on macrophages, was also able to increase expression of the reporter gene driven by the HIV-1 LTR. However, lower doses of taxol that were not sufficient to trans-activate the LTR or to induce TNF alpha expression were cytotoxic to RAW264 cells suggesting that the cytotoxic and LPS-like activities of taxol were not linked. This cell line provides a convenient method for detecting LPS-like activity and is a useful tool for examining LPS and TNF alpha signalling pathways.