We have shown that lymphocytes stimulated by PHA produce colony-forming unit of granulocyte/monocyte (CFU-GM)-stimulating and -inhibiting activities, IFN-gamma, and lymphotoxin (LT). IFN-gamma is necessary for inhibition of CFU-GM by PHA-conditioned medium (CM), as shown by experiments in which removal of IFN-gamma from PHA-CM abrogated inhibition. However, experiments in which rIFN-gamma was added to IFN-gamma-depleted PHA-CM revealed the presence, in PHA-CM, of other factors that act in synergy with IFN-gamma to inhibit CFU-GM. Fractionation of PHA-CM on a Sephadex G-100 column was used to separate IFN-gamma and LT. Colony-inhibiting activity was eluted in fractions that contained both IFN-gamma and LT activities, identifying LT as a factor present in PHA-CM that synergizes with IFN-gamma to inhibit CFU-GM. Treatment of PHA-CM with mAb against either IFN-gamma or LT completely abrogated the colony-inhibiting activity, demonstrating a requirement for both lymphokines in PHA-CM-induced inhibition of CFU-GM. Experiments using rIFN-gamma and preparations of purified LT confirmed that neither lymphokine alone, when added to bone marrow cells at the concentrations present in PHA-CM, strongly inhibited day 7 or day 14 CFU-GM, but that the two lymphokines, added together, behaved synergistically to inhibit CFU-GM by up to 70%. The inhibition observed using purified preparations of lymphokines shows that synergy between IFN-gamma and LT is sufficient to explain PHA-CM-induced inhibition of CFU-GM. Our findings suggest that activated T cells regulate hematopoiesis through the release of inhibitory as well as stimulatory factors, and that the simultaneous production of IFN-gamma and LT may represent a mechanism of suppression of hematopoiesis in the cases of bone marrow failure associated with the presence of activated T cells.