The diverse roles of interferon-alpha (IFN-alpha) in regulating the immune response to infectious agents suggested that it might affect dendritic cell (DC) development. Peripheral blood mononuclear cells cultured with IFN-alpha and granulocyte-macrophage colony-stimulating factor (GM-CSF) developed a dendritic morphology and expressed high levels of the class I and II human leukocyte antigens (HLA), B7 co-stimulatory molecules, adhesion proteins, and CD40. Elevated DC expression of B7-2 and HLA-DR was observed with increasing IFN-alpha concentrations up to 5000 U/mL. The effects of IFN-alpha on DC immunophenotype were not reversed by adding neutralizing antibodies against interleukin-4 (IL-4) or tumor necrosis factor alpha to the cell cultures or by eliminating lymphocytes from the cultures. The addition of IFN-alpha to cultures containing optimal concentrations of IL-4 and GM-CSF significantly increased the B7-2 and HLA-DR levels above those present on DCs grown in two cytokines. The DCs generated with IFN-alpha and GM-CSF were potent antigen-presenting cells in allogeneic mixed leukocyte reactions. They also were capable of taking up, processing, and presenting tetanus toxin to autologous T lymphocytes. These results demonstrate an important role for IFN-alpha in the generation of DCs with potent antigen-presenting capabilities from peripheral blood monocytes.