Resident macrophages have been suggested to participate in the initiation of beta cell damage during the development of autoimmune diabetes. The purpose of this study was to determine if the endogenous production and release of interleukin 1 (IL-1) in human islets of Langerhans by resident macrophages results in the inhibition of beta cell function. Treatment of human islets with a combination of tumor necrosis factor (TNF) + lipopolysaccharide (LPS) + interferon-gamma (IFN-gamma) stimulates inducible nitric oxide synthase (iNOS) expression, nitric oxide production, and inhibits glucose-stimulated insulin secretion. The IL-1 receptor antagonist protein (IRAP) prevents TNF + LPS + IFN-gamma-induced iNOS expression and nitrite production, and attenuates the inhibitory effects on glucose-stimulated insulin secretion by human islets. Inhibition of iNOS activity by aminoguanidine also attenuates TNF + LPS + IFN-gamma-induced inhibition of insulin secretion by human islets. These results indicate that the inhibitory effects of TNF + LPS + IFN-gamma are mediated by nitric oxide, produced by the actions of IL-1 released endogenously within human islets. Reverse transcriptase polymerase chain reaction was used to confirm that TNF + LPS + IFN-gamma stimulates the expression of both IL-1alpha and IL-1beta in human islets. Two forms of evidence indicate that resident macrophages are the human islet cellular source of IL-1: culture conditions that deplete islet lymphoid cells prevent TNF + LPS + IFN-gamma-induced iNOS expression, nitric oxide production, and IL-1 mRNA expression by human islets; and IL-1 and the macrophage surface marker CD69 colocalize in human islets treated with TNF + LPS + IFN-gamma as determined by immunohistochemical analysis. Lastly, nitric oxide production is not required for TNF + LPS + IFN-gamma-induced IL-1 release in human islets. However, cellular damage stimulates IL-1 release by islet macrophages. These findings support the hypothesis that activated islet macrophages may mediate beta cell damage during the development of insulin-dependent diabetes by releasing IL-1 in human islets followed by cytokine-induced iNOS expression by beta cells.