We reported earlier that neonatal monocyte-derived macrophages (MDM) could not be fully activated with IFN-γ, a finding that could not be attributed to lower expression of IFN-γ receptors on the neonatal cells. In this study we explored elements of IFN-γR-mediated signalling in cord monocytes and MDM. Intracellular expression of STAT-1 was analysed by flow cytometry. We have assessed phosphorylation of STAT-1 by using MoAbs that distinguish native and phosphorylated forms of STAT-1 on a discrete cell basis. Using MoAbs against the native form of STAT-1 revealed comparable expression of this protein in cord and adult cells (both monocytes and MDM). However, STAT-1 phosphorylation in response to IFN-γ was significantly decreased in neonatal monocytes (P < 0·05) and MDM (P < 0·01) compared to adult cells (n > 5 for each). These data suggest deficient cytokine-receptor signalling in neonatal mononuclear phagocytes exposed to IFN-γ. We propose that decreased STAT-1 phosphorylation and activation may represent developmental immaturity and may contribute to the unique susceptibility of neonates to infections by intracellular pathogens.