We have examined the cell-mediated immunity (CMI) to Staphylococcus aureus (S. aureus) and Staphylococcal enterotoxin B (SEB) in peripheral blood mononuclear cells (PBMC) from children with atopic dermatitis (AD) and from non-atopic child controls by measurement of proliferative responses and production of the cytokines IFN-gamma and IL-4. PBMC from children with AD showed significantly higher proliferative responses to both S. aureus (P < 0.01) and SEB (P < 0.05). Despite this enhanced proliferation, production of IFN-gamma in response to S. aureus (P < 0.001) and SEB (P < 0.01) from these PBMC was significantly diminished. In contrast, PBMC from children with AD were significantly more likely to produce IL-4 in response to S. aureus (P < 0.01). These findings demonstrate in vitro heightened CMI to S. aureus in children with AD, and implicate S. aureus as a potent inflammatory stimulant. Impaired IFN-gamma production to S. aureus in vivo may result in failure to eradicate S. aureus from skin. The organism's persistence on skin would contribute to inflammation by causing continued T cell activation and release of pro-inflammatory mediators.