We previously identified a specific receptor for alpha-fetoprotein (AFP) on human monocytes. Although AFP alters many immune cell functions, the effect of AFP on monocyte cytokine production is unknown. Because tumor necrosis factor–alpha (TNF-α) and interleukin-1β (IL-1β) are important cytokines in immunoregulation, we investigated whether AFP could modulate TNF-α and IL-1β production in U937, a human monocytic cell line. Our results showed that U937 cells secreted TNF-α and IL-1β in response to either phorbyl 12-myristate 13-acetate (PMA) or IFN-γ + LPS. In contrast, AFP significantly suppressed PMA-induced TNF-α and IL-1β production by U937 cells in a time and dose dependent fashion. Pretreatment of U937 cells with AFP resulted in maximal inhibition of PMA-stimulated TNF-α and IL-1β production by 58% and 67%, respectively. AFP also inhibited interferon-γ plus lipopolysaccharide (IFN-γ + LPS)–induced TNF-α and IL-1β production. Furthermore, Northern blot analysis showed that AFP suppressed PMA-mediated TNF-α and IL-1β messenger RNA (mRNA) expression. PMA-induced prostaglandin E2 (PGE2) production by U937 cells was enhanced by AFP. Pretreatment with indomethacin, a cyclooxygenase inhibitor, reversed AFP-inhibited TNF-α production by 78%. Thus, we conclude that AFP downregulates TNF-α and IL-1β production via a PGE2-dependent mechanism. (Hepatology 1995; 22:921–928.)