Presentation of antigen to T lymphocytes without the appropriate co-stimulatory signals results in a state of antigen-specific unresponsiveness. Despite the presumed importance of the B7-CD28 interaction for the initiation and maintenance of T cell-mediated immune responses, relatively few studies have addressed the regulation of B7 expression. We have studied the expression of the CD80 (B7-1) and B7-2 molecules on peripheral blood monocytes following different activation signals, and it was demonstrated that not only IFN-gamma, but also granulocyte macrophage colony stimulating factor can induce CD80 expression on monocytes. In addition, we found that cross-linking of FcR on monocytes strongly inhibits the up-regulation of CD80 and B7-2, with as a functional consequence that the capacity to function as antigen presenting cells (APC) and to stimulate T cell activation is severely impaired. When cultures were prepared in 96-well plates coated with human IgG, stimulation of T cells with allogeneic monocytes resulted only in modest T cell proliferation and no detectable IL-2 secretion as compared with untreated culture plates or plates coated with Fab fragments of human IgG. Under these conditions cross-linking of CD28 on the T cells with specific mAb completely reverted the inhibitory effect observed after culture on IgG-coated plates. Furthermore, FcR cross-linking on monocytes strongly inhibited the capacity of monocytes to induce a specific memory T cell response to viral, bacterial and fungal antigens, whereas the treatment did not impair the capacity of the T cells to respond to pokeweed mitogen, phytohemagglutinin and concanavalin A. We conclude that after FcR cross-linking, the impaired APC function is most likely due to the inability of monocytes to provide the essential co-stimulatory signals to the T cells via the B7-CD28/CTLA-4 interaction.