T he shape and function of adherent cells cultured from rheumatoid synovial membranes are influenced by immune cells, and their products. The synovial cells produce collagenase and prostaglandin E2 (PGE2), the levels of which are increased when the cells are incubated with the monokine, mononuclear cell factor/interleukin 1. The majority of adherent synovial cells are fibroblastlike in appearance and synthesize collagens and fibronectin; the synthesis of collagens and fibronectins are also increased by a monocyte factor. In the present study we found that the fibroblastlike cells expressed major histocompatibility complex class II (Ia-like) antigens after initial dispersion from the synovial membrane. Monocyte lineage antigens were detected on some round cells in early passage, but no T lymphocytes were identified in established cultures. There was loss of Ia expression on the fibroblastlike cells with age and passage in culture. The addition of the lymphokine, gamma interferon (recombinant), induced class II antigen (DR and DS/DQ) expression in early or late passage cells in a time- and dose-dependent manner and required protein synthesis. Furthermore, the adherent synovial fibroblastlike cells continued to be Ia-positive when examined as long as 10 d after the removal of gamma interferon. Ia expression was also induced by gamma interferon in normal skin fibroblasts. Synovial cells that could be induced to express Ia also bound a monoclonal antibody to type III collagen (a fibroblast marker). Gamma interferon, while inducing Ia expression, decreased the binding of type III collagen antibody on unstimulated as well as monokine-stimulated cells. Analysis of [3H]proline-labeled medium by SDS polyacrylamide gel electrophoresis showed that gamma interferon decreased the synthesis of type I and III collagens and fibronectin by adherent synovial cells in a dose-dependent manner. These findings suggest that Ia expression by synovial tissue cells is not cell-specific, but reflects one or several related events, such as the degree of T lymphocyte infiltration, the presence of factors that stimulate gamma interferon release, or an increased sensitivity of the cells to gamma interferon. Whereas the synthesis of class II antigens is enhanced by the lymphokine gamma interferon, and a monocyte factor(s) stimulates collagen, collagenase and PGE2 synthesis by the same cells, gamma interferon inhibits basal and monokine-induced collagen synthesis. Thus, lymphokines and monokines may influence the extent of fibrosis as contrasted to matrix destruction at various stages of the rheumatoid lesion by affecting the function of fibroblastlike synovial cells.