Footpad swelling developing in mice after local injection of LPS (S. marcescens) was found to consist of two phases with peaks occurring on days 2 to 3 and 6 to 8, respectively. Histopathologically, the reaction was characterized by edema and mononuclear cell infiltration; the second peak was associated with intravascular thrombosis as is typically described for the Shwartzman reaction to LPS. Recombinant DNA-derived IFN-gamma, administered by i.p. injection, had a suppressive effect on the development of the reaction. The same effect was seen with recombinant DNA-derived IFN-alpha 1 and with the natural mixture of IFN-alpha and -beta. In mice pretreated with neutralizing monoclonal antibodies to IFN-gamma, the footpad response to LPS was modified in that a delayed monophasic rather than a biphasic response occurred. These data indicate that LPS induces local production of IFN-gamma, which acts as a trigger or positive regulator of the reaction. The effect of a single pretreatment with neutralizing anti-IFN-gamma antibody was found to last for as long as 6 wk. Experiments in which antibody administration was delayed till after LPS challenge indicated that endogenous IFN-gamma was also involved in the late phases of the inflammation. The results show that regulation of inflammation by interferons is complex in that local IFN-gamma acts as a positive factor, whereas systemic IFN-alpha 1 and -gamma, probably through indirect mechanisms, downregulate inflammation.