Interleukin (IL) 12 is a proinflammatory cytokine produced by phagocytic cells, B cells, and other antigen-presenting cells that modulates adaptive immune responses by favoring the generation of T helper type 1 cells. IL-12 mediates some of its physiological activities by acting as a potent inducer of interferon (IFN) gamma production by T and natural killer cells. IFN-gamma enhances the ability of the phagocytic cells to produce IL-12 and other proinflammatory cytokines. Thus, IL-12-induced IFN-gamma acts in a positive feedback loop that represents an important amplifying mechanism in the inflammatory response to infections. We show here that IFN-gamma enhances IL-12 production mostly by priming phagocytic cells for lipopolysaccharide (LPS)-induced transcription of the IL-12 p40 gene, which encodes the heavy chain of the IL-12 heterodimer; furthermore, IFN-gamma directly induces transcription of the IL-12 p35 gene, which encodes the light chain of IL-12, and has at least an additive effect with LPS stimulation in inducing its transcription. The priming effect of IFN-gamma on the LPS-induced p40 gene transcription requires preincubation of the cells with IFN-gamma for at least 8 h to obtain a maximal effect. The priming effect of IFN-gamma for IL-12 production is predominantly at the transcriptional level for both the p40 and the p35 gene, and no evidence for a major role of posttranscriptional or translational mechanisms was found. A 3.3-kb human IL-12 p40 promoter construct transfected into cell lines recapitulated the tissue specificity of the endogenous gene, being silent in two human T cell lines, constitutively active in two human Epstein-Barr virus-positive B lymphoblastoid cell lines, and LPS inducible in the human THP-1 and mouse RAW264.7 monocytic cell lines. Because the RAW264.7 cell line is easily transfectable and regulates the endogenous IL-12 p40 gene in response to IFN-gamma or LPS similarly to human monocytes, it was used for analysis of the regulation of the cloned human IL-12 p40 promoter. A requirement for the region between -222 and -204 in both LPS responsiveness and IFN-gamma priming was established. This region contains an ets consensus sequence that was shown to mediate activation of the promoter by IFN-gamma and LPS, as well as by a cotransfected ets-2. The -222 construct was also regulated in a tissue-specific manner. Two other elements, IRF-1 located at -730 to -719, and NF-IL6 at -520 to -512, were also studied by deletion analysis, which did not result in decreased response to IFN-gamma and LPS stimulation.