To further define intraepithelial lymphocytes (IELs) in celiac disease (CD) and giardiasis, IELs were probed for the presence of cytolytic granules containing granzyme B (GrB) and T-cell-restricted intracellular antigen (TIA)-1. The expression of TIA-1, GrB, CD3 (T-cell-receptor-associated complex), and Leu-7 (subset of natural killer cells) was studied by a sensitive three-step immunoperoxidase technique. Stained IELs were determined quantitatively, and results were expressed as number of stained IELs per 100 epithelial cells (ECs). The relative content in labeled lamina propria lymphocytes was determined and expressed as the percentage of all lamina propria cells counted. When compared with controls, CD3+ and GrB+ IELs were significantly increased (P < 0.0004) in CD paralleled by an increase in TIA-1+ IELs (P < 0.0004). In CD, the highest numbers of IELs containing GrB were found in subjects with a flat mucosa (median, 38 IELs/100 ECs, P < 0.0004), followed by cases with shortened and blunted villi (median, 8 IELs/100 ECs, P < 0.0004) and, finally, CD patients with an intact villous architecture (median, 0.5 IELs/100 ECs, P < 0.02). Except for cases with giardiasis, Leu-7+ IELs were virtually absent in all groups as were GrB+ IELs in the controls and in subjects with giardiasis. In the lamina propria of CD subjects, GrB+ lymphocytes were also significantly increased (P < 0.001), whereas controls and cases with giardiasis were essentially free of GrB+ cytotoxic T lymphocytes. The percentage of CD3+ lamina propria lymphocytes was nearly equal in all groups. In humans and mice, extensive studies revealed a GrB expression to be absolutely restricted to activated cytotoxic T lymphocytes and natural killer cells. TIA-1, on the other hand, is considered a marker of resting T lymphocytes possessing cytolytic potential. We therefore conclude that IELs are cytotoxic T cells that are in a resting state in the normal small bowel and in giardiasis. In CD, they become activated as suggested by the GrB positivity of their granules.