IL-12, a heterodimeric cytokine, consists of two disulfide-linked subunits, p40 and p35. We investigated the role of p40 in ligand binding and signal transduction by expressing this subunit alone in COS cells. Culture media of the transfected COS cells exhibited specific dose-dependent binding to KIT225/K6 cells, a human T cell line that expresses IL-12R. Analysis of the culture media by SDS-PAGE and Western blotting demonstrated the presence of 40-kDa monomers and 80-kDa disulfide-linked homodimers. The two p40 species were purified and identified by N-terminal sequencing and proteolytic peptide mapping. Characterization of the p40 proteins for binding and bioactivity showed that both the p40 monomer and dimer inhibited 125I-labeled IL-12 binding to IL-12R, but the 80-kDa species, having a 50% inhibitory concentration (IC50) of 20 to 70 ng/ml, was at least 20-fold more effective than the monomer. Although neither the monomer nor the dimer stimulated human PHA-blast proliferation, the 80-kDa dimer inhibited IL-12-induced proliferation in a dose-dependent manner with an IC50 of 65 ng/ml. The results suggest that the IL-12 p40 subunit contains the essential epitopes for receptor binding. However, a proper conformation required for high affinity binding is achieved only when p40 is associated with a p35 subunit or another p40 subunit. When p40 is associated with a p35 subunit, the heterodimer acts as an agonist mediating biologic activity. However, when p40 associates with another p40, the homodimer behaves as an antagonist in vitro.