The expression of MHC class I and II molecules on cultured rat and human Schwann cells (SCs) was studied to determine whether these molecules could be synthesized by SCs in the absence of T cells. Normal rat and human SCs in vitro expressed low levels of class I MHC, but this was markedly increased by incubation with interferon gamma (IFN-gamma). Untreated SCs of rat or human origin did not express detectable class II MHC molecules, but after 48 hours incubation with IFN-gamma 100 U/ml, 20% of rat SCs and 90% of human SCs were class II positive. Immunoelectron microscopy confirmed the surface expression of MHC molecules on SCs and demonstrated class II MHC within endocytotic vesicles. These findings provide further evidence for an immunological role for SCs as antigen presenting cells or as targets for cytotoxic T cells.