Tumor cells that are treated with rIL-10 or transfected with the IL-10 gene show phenotypic changes. These include low but peptide-inducible expression of MHC class I, low sensitivity to specific CTL-mediated lysis, and increased NK sensitivity. In vitro-established mouse tumor lines were screened for IL-10 expression and production, and a large proportion of plasmocytomas or T cell lymphomas were found to produce IL-10. Since one of these lines was the prototype NK target cell YAC-1, we investigated whether the high IL-10 production of this cell line was related to its high NK sensitivity and its defects in MHC class I expression. The decrease in H-2 expression following the in vitro culture of in vivo-passaged YAC-1 cells was accompanied by a gradual increase in IL-10 production, whereas the reverse was found when passing in vitro-grown YAC-1 in vivo as an ascites tumor in syngenic mice. In addition, differences in YAC-1 MHC class I expression correlated with alterations in the functional activity of TAP-1/2 proteins. YAC-1 cells that were transduced with a retroviral IL-10 antisense construct (Y-IL-10 AS) only produced about half of the IL-10 that was produced by YAC-1 transduced with the control construct (Y-IL-10 Mock). Relative to Y-IL-10 Mock cells, the expression of H-2 on Y-IL-10 AS cells was markedly increased, and NK sensitivity was decreased. These data argue for a mechanism wherein IL-10 production is causally related to the low H-2 expression, decreased TAP function, and high NK sensitivity of YAC-1 cells.