This paper describes the immunoregulatory effects of interleukin-10 (IL-10) on synovial cells in vitro. Synovial cells were cultured with IL-10 in the presence or absence of various cytokines. Following incubation, the costimulatory molecule expression on synovial cells and cytokine production in culture supernatants were analysed by an indirect immunofluorescence method and enzyme-linked immunosorbent assay, respectively. We also examined the effect of IL-10 on the function of synovial cells as antigen-presenting cells (APC). Synovial cells spontaneously express several kinds of costimulatory molecule and produce various kinds of cytokines. Stimulation of synovial cells with interferon-gamma (IFN-gamma), IL-1 beta, or 12-O-tetradecanoyl phorbol 13-acetate (TPA) markedly enhanced the expression of costimulatory molecules and cytokine production of these cells. Both spontaneous and up-regulated costimulatory molecule expression and cytokine production were significantly suppressed by the addition of IL-10. Autologous T-cell proliferation was stimulated by purified protein derivative (PPD) in IFN-gamma-treated synovial cells and treatment of these synovial cells with IL-10 also suppressed T-cell proliferation. Our results suggest that IL-10 has an inhibitory effect on synovial cells and is an important immunoregulatory component of the cytokine network in rheumatoid arthritis.