Antithymocyte globulin (ATG) is an effective treatment in patients with severe aplastic anemia (SAA). Its mechanism of action remains unclear, although it has been assumed to be immunosuppressive. However, ATG has also been shown by several laboratories to be immunostimulatory. Recently, interleukin-1 (IL-1) production has been found to be decreased in lipopolysaccharide-stimulated peripheral blood monocytes obtained from SAA patients. We have investigated the ability of ATG to function as an immunostimulatory agent via the production of IL-1 and IL-6 by normal human monocytes in vitro. Supernatants from ATG- stimulated monocytes were assayed for biologically active and immunoreactive IL-1 and IL-6. We have found that ATG, via its F(ab')2 fragment is a powerful inducer of IL-1 and IL-6 production. Furthermore, ATG induction of both cytokines from normal monocytes required de novo synthesis, as determined by 35S-methionine incorporation. Because these two cytokines synergize with other cytokines at both the stem cell and progenitor levels, these stimulatory properties of ATG may be relevant to the treatment of SAA. This would favor the hypothesis of a bimodal mechanism for ATG as an inducer of hematopoietic growth factors and as an immunosuppressive agent.