The mechanism whereby glucocorticosteroids are immunosuppressive is unknown. One potential mechanism of action of these compounds is inhibition of arachidonic acid metabolism. We found that the inhibition of lymphocyte proliferation by hydrocortisone or dexamethasone was mimicked by nonspecific lipoxygenase inhibitors and also by a specific 5-lipoxygenase inhibitor, but not by a specific cyclooxygenase inhibitor. Mitogen-stimulated cultures of T cells produce approximately 5 X 10(-9) M leukotriene B4 (LTB4) in 24 h. This production of LTB4 is completely inhibited by concentrations of hydrocortisone or lipoxygenase inhibitors that inhibit mitogen-induced [3H]thymidine incorporation. The inhibition of lymphocyte proliferation by either hydrocortisone or by the 5-lipoxygenase inhibitor was totally reversed by LTB4 but not by leukotriene C4 or leukotriene D4. LTB4 had no effect on the inhibition of lymphocyte proliferation by noncorticosteroids such as prostaglandin E2, histamine, or gamma-interferon. The inhibition of interleukin 2 (IL-2) production by hydrocortisone or dexamethasone was also completely reversed by exogenous LTB4. LTB4 alone did not cause IL-2 production or cell proliferation when added to resting lymphocytes. Thus, endogenous LTB4 production appears to be necessary but not sufficient for phytohemagglutinin-induced IL-2 production and lymphocyte proliferation. Glucocorticosteroids inhibit IL-2 production and lymphocyte proliferation by inhibiting endogenous LTB4 production.