We have studied cells dispersed with proteolytic enzymes from rheumatoid arthritic synovectomy specimens to determine the cell type(s) responsible for joint destruction. Initially 10-50% of these cells adhered to culture dishes within 24 hr and were of two main types: small, round cells and larger, stellate cells. During 1-4 days of culture, 5-25% had Fc receptors and 25-50% showed brisk phagocytosis. Daily producition, per 10(6) cells of collagenase (EC 3.4.24.3) (after trypsin pretreatment) was up to 70 mug of collagen fibrils lysed per min at 37 degrees (70 units), of prostaglandin (PGE2), up to about 1200 ng, and of lysozyme, up to about 100 mug. Under identical conditions of assay, fibroblasts grown from explants of synovium produced no detectable collagenase or lysozyme, and PGE2 was only 2-4 ng. With the dispersed cell preparations, macrophage markers (Fc receptors and lysozyme) were undetectable after 4 days and PGE2 decreased rapidly after about 7 more days. However, collagenase production continued for 3-25 weeks, and in some cultures, after cell passage. At these later stages, large, slow-growing stellate cells were predominant and could phagocytose carbon particles if incubated for greater than 6-8 hr. Indomethacin (14 muM) inhibited PGE2 but stimulated collagenase production whereas dexamethasone (10 nM) inhibited both. Production of PGE2 and collagenase in large amounts in vitro by these cells suggests that they may be involved in joint destruction in vivo. The precise origin of these synovial cells and the mechanisms responsible for the sustained production of collagenase at a high rate remain unidentified.