Previous studies have described a 22 kD IL-1 inhibitor in the supernatant of human monocytes cultured on adherent immune complexes (J. Immunol. 134:3868, 1985). The studies reported herein further detail the conditions of production and biological properties of this IL-1 inhibitor. The inhibitor was produced by human monocytes cultured on adherent human IgG with maximal production between 8 and 24 hr. The IL-1 inhibitor was not performed in the cells but required transcription and new protein synthesis. The inhibitor blocked IL-1 augmentation of PHA-induced murine thymocyte proliferation but not IL-2-induced stimulation of CTLL or HT-2 cell lines. In addition, the inhibitor blocked IL-1-stimulated collagenase production from rabbit articular chondrocytes and IL-1-induced PGE2 production from human fibroblasts and synovial cells. The IL-1 inhibitor was not transforming growth factor beta (TGF beta) as determined by: the failure of anti-TGF beta antibodies to reduce IL-1 inhibitory activity, the separation of TGF beta from the IL-1 inhibitor by ion exchange chromatography, and the failure of TGF beta to inhibit IL-1-induced PGE2 production from synovial cells. IL-1 and the inhibitor showed no immunological cross-reactivity by Western blot analysis. The inhibitor specifically blocked binding of IL-1 to its receptor on the murine thymoma cell line EL4-6.1. These results indicate that a specific inhibitor of IL-1-induced immune and inflammatory cell responses is produced by monocytes cultured on adherent immune complexes or adherent IgG. This IL-1 inhibitor may be of importance in modulating the effects of IL-1 in the monocyte microenvironment.