The Ly-6 alloantigens represent a family of phosphatidylinositol anchored proteins that function in the process of T lymphocyte activation and whose expression are often induced on T and B lymphocytes after activation by mitogens or Ag. Previous studies have shown that the induction of Ly-6 alloantigens in T cells is at least in part due to the action of IFN-alpha/beta or IFN-gamma. In the present report, we have demonstrated that IFN-gamma also induced Ly-6 molecules on B lymphocytes, several B cell tumors, and bone marrow cells. Furthermore, we now show that TNF also participates in the induction of at least one of the Ly-6 proteins, Ly-6A/E. TNF was found to synergize with IFN-gamma to induce Ly-6A/E expression in thymocytes, T lymphocytes, bone marrow cells, but not B lymphocytes. For T lymphocytes, the synergistic induction of Ly-6A/E by TNF was restricted to cells from the Ly-6.1 haplotype, whereas IFN-gamma was sufficient to fully induce Ly-6A/E expression in cells from the Ly-6.2 haplotype. This result is consistent with the notion that there is more complex regulation of the Ly-6A/E molecules in T cells obtained from the Ly-6.1 haplotype. For T lymphocytes from BALB/c (Ly-6.1) mice, Ly-6A/E, but not Ly-6C, molecules were synergistically induced by IFN-gamma and TNF. The induction of Ly-6A/E molecules on BALB/c T cells resulted in an enhanced capacity to activate these cells through the Ly-6 T cell activation pathway. One transformed T cell line, 5.1.2, was also identified whose Ly-6A/E molecules were synergistically induced by IFN-gamma and TNF. Optimal expression of Ly-6A/E molecules on 5.1.2 cells required continuous culture of this cell line with these two cytokines and resulted in the detection of optimal levels of cytoplasmic Ly-6A/E mRNA by Northern blot analysis. This latter result suggests that IFN-gamma and TNF regulate Ly-6A/E at the level of transcription and/or mRNA stabilization.