Recent studies have found aberrant expression of class II antigens by bronchial epithelial cells (BECs), suggesting that these cells may also be involved in airway mucosal immunity. However, the regulation of class II antigen expression on BECs by cytokines and the functional capacity of such cells bearing class II molecules remain unknown. We investigated the effect of IFN-gamma on class II antigen expression by cultured rat BECs, as well as the ability of these cells to present intact protein antigens to specifically sensitized T cells. Although primary BECs did not express class II antigens, IFN-gamma readily induced their expression in a dose-dependent manner. More than 85% of the BECs treated with 1000 U/ml of IFN-gamma were positive for class II antigens. In addition, when IFN-treated BECs bearing class II molecules were pulsed with ovalbumin (OVA), they significantly stimulated the proliferation of OVA-sensitized T cells, whereas cells that were not treated with IFN-gamma but were pulsed with OVA did not do so. Our findings indicate that BECs bearing class II molecules are capable of presenting OVA to OVA-sensitized T cells. These results suggest that various pathological conditions causing the local production of IFN-gamma may increase class II antigen expression on BECs, which in turn may modulate the airway mucosal immune response by the presentation of antigens to T cells.