Soluble CD23 (sCD23) has multiple IgE-independent biological activities. In the present study, we examined the regulatory effect of sCD23 on cytokine production by human peripheral blood mononuclear cells (PBMC). We show that sCD23 enhances by about 80-fold the interleukin 2 (IL-2)-induced interferon gamma (IFN-gamma) production and by about 10-fold the response to IL-12. This potentiating activity is time and dose dependent and is not associated with a significant effect on DNA synthesis. The sCD23 costimulatory activity for IFN-gamma synthesis is drastically reduced in monocyte-depleted PBMC, suggesting that monocytes may be the target for sCD23. This hypothesis was supported by the following observations. First, sCD23 alone is a potent inducer of tumor necrosis factor alpha (TNF-alpha) production by PBMC and this effect disappears after monocyte depletion. The triggering of TNF-alpha release is specifically inhibited by neutralizing anti-CD23 monoclonal antibody (mAb). In addition, IL-2 and IL-12 synergize with sCD23 to induce TNF-alpha production. Second, sCD23 triggers the release of other inflammatory mediators such as IL-1 alpha, IL-1 beta, and IL-6. Finally, TNF-alpha production in response to IL-2 and sCD23 precedes IFN-gamma and IFN-gamma secretion is significantly inhibited by anti-TNF-alpha mAb, indicating that the sCD23 costimulatory signal for IFN-gamma production may be partially mediated by TNF-alpha release. It is proposed that sCD23 is a proinflammatory cytokine that, in addition, may play an important role in the control of the immune response via the enhancement of IFN-gamma production.