Heparan sulphate is a common glycosaminoglycan component of proteoglycans present on the luminal surface of vascular endothelium. It has been proposed that an important function of these molecules is the sequestration of a range of proinflammatory and proadhesive cytokines. Such cytokines play a vital role during lymphocyte recruitment from the blood at sites of inflammation. In this study it is shown that the effects of interferon-gamma (IFN-gamma), but not of tumour necrosis factor-alpha (TNF-alpha), are inhibited by treatment with soluble heparin. Specifically, heparin was shown to inhibit the induction of class II MHC antigens and the up-regulation of intercellular adhesion molecule-1 (ICAM-1) produced by treatment of cultured human endothelial cells with IFN-gamma. Furthermore, it was shown that heparin blocked the enhanced adhesion of T lymphocytes to IFN-gamma-treated endothelial cells. Investigation of the inhibitory effects of other GAG molecules demonstrated a requirement for heparin-like structural domains as chondroitin sulphate was unable to inhibit the function of IFN-gamma. These results may explain reported immunosuppressive properties of heparin, and are consistent with the model that heparin may compete with cell surface GAGs to bind IFN-gamma, thereby reducing effective biological activity.