Granulomatous inflammation develops under the regulatory influence of cytokines produced by local mononuclear phagocytes, T cells, dendritic cells, fibroblasts, and other local cells. In sarcoidosis, granulomatous inflammation is characterized by dominant expression of T helper 1 (Th1) cytokines such as IFN gamma and interleukin (IL)-2 with low levels of expression of T helper 2 (Th2) cytokines such as IL4 and IL5. Recent studies show that the cytokine IL12, the most important regulator of Th1 immune responses currently known, is upregulated at sites of inflammation in sarcoidosis. In particular, enhanced expression of IL12 is seen in sarcoid lung and lymph node, along with dysregulated production of IL12 by stimulated and unstimulated sarcoid alveolar macrophages. The known dependence of granulomatous inflammation on type 1 cytokines (IFN gamma, IL12) in many experimental models of granulomatous disease makes it likely that these cytokines function in a similar fashion in the initiation and maintenance of granulomatous inflammation in sarcoidosis. Whether these same type 1 cytokines drive granulomatous inflammation in patients with extensive fibrocystic lung disease remains unknown. TGF beta, a known inhibitor of IL12 and IFN gamma production, is produced at higher levels by lung cells from those patients who undergo remission of their disease, suggesting that TGF gamma is important in downregulating granulomatous inflammation in sarcoidosis. These studies offer new insight into the molecular mechanisms of granuloma formation in sarcoidosis and provide a framework for developing new therapeutic strategies for the treatment of this disease.