Rat Kupffer cells stimulated with bacterial lipopolysaccharide (LPS) produced high levels of interleukin 1 (IL-1), as determined by thymocyte proliferation assay. Indomethacin revealed a dose-dependent augmentation in IL-1 production, in parallel with a dose-dependent reduction in prostaglandin E2 production by Kupffer cells. The addition of exogenous prostaglandin E2, dibutyryl cAMP, or isoproterenol led to a dose-dependent suppression of IL-1 production. The supernatant from LPS-stimulated Kupffer cells also contained factors that inhibited IL-1-induced thymocyte proliferation. Upon gel filtration, two inhibitory peaks, at apparent MW of 27,000 and 6000, were obtained. The latter but not the former fraction also affected interleukin 2 (IL-2)-induced thymocyte proliferation. Increasing amounts of IL-1 overcame the inhibitory activity derived from the 27,000 MW fractions. These results suggest to us that prostaglandin E2 and IL-1 inhibitor released by Kupffer cells may be involved in negative self-control in regulating IL-1 production and its action.