Production of extracellular matrix proteins — in particular, the proteoglycans-by macrophages is important in many of their functions, including cell-cell recognition, adhesion and phagocytosis. In this study, we characterized changes in sulfated proteoglycan production by hepatic macrophages following in vivo activation with lipopolysaccharide. We found that both resident Kupffer cells and liver macrophages from lipopolysaccharide-treated rats incorporated [35S]sulfate into proteoglycans. Lipopolysaccharide-activated macrophages incorporated two to three times more of the label than did resident Kupffer cells. In addition, although both cell types produced chondroitin sulfate and heparan sulfate, resident Kupffer cells synthesized more chondroitin sulfate whereas lipopolysaccharideactivated cells produced more heparan sulfate. Using specific antibodies and flow cytometry, we also found that hepatic macrophages produced chondroitin-4-sulfate, chondroitin-6-sulfate and chondroitin-O-sulfate. Lipopolysaccharide-activated macrophages contained more chondroitin-4-sulfate and chondroitin-O-sulfate and less heparan sulfate than did resident Kupffer cells. Both tunicamycin and β-D-xylosides, inhibitors of sulfated proteoglycan biosynthesis, were found to block phagocytosis by the cells. Taken together, these results suggest that sulfated proteoglycans are important in activation and functional responsiveness of liver macrophages. (HEPATOLOGY 1991;14:306–312.)