IL‐1 inhibits erythropoiesis in vivo and in vitro. This inhibition was studied by comparing the effect of recombinant human IL‐1 (rhIL‐1) on highly purified CFU‐erythroid (E) generated from peripheral blood burst‐forming units‐erythroid (BFU‐E) (mean purity 44.4%) with its effect on unpurified marrow CFU‐E (mean purity 0.36%). Colony formation by marrow CFU‐E was significantly inhibited by rhIL‐1, while colony formation by highly purified CFU‐E was not inhibited. However, purified CFU‐E colonies were inhibited by rhIL‐1 in the presence of autologous T‐lymphocytes, and also by cell‐free conditioned medium prepared from T‐lymphocytes stimulated by rhIL‐1. This inhibitory effect was ablated by neutralizing antibodies to γinterferon (IFN), but not by antibodies to human IL‐1, tumor necrosis factor, or βIFN. Colony formation by highly purified CFU‐E was also inhibited by recombinant human γIFN (rhγIFN). IL‐1 and γIFN play significant roles in the pathogenesis of the anemia of chronic disease. These studies indicate that rhIL‐1 inhibits CFU‐E colony formation by an indirect mechanism involving T‐lymphocytes and requiring γIFN and that γIFN itself is most probably the direct mediator of this effect.