The multifunctional cytokines, transforming growth factor (TGF)-beta 1 and beta 2, have the capability of inducing human peripheral blood monocytes to express the type III receptor for the Fc portion of IgG (Fc gamma RIII/CD16). In this study we show that the T cell-derived cytokine, IL-4, antagonizes the ability of TGF-beta to induce the expression of CD16. Furthermore, this ability to down-regulate expression of CD16 is completely abrogated after treatment with polyclonal anti-IL-4, suggesting that IL-4 is solely responsible for the observed inhibition. The mechanism for negating the effect of TGF-beta is not due to decreased expression of surface receptors for TGF-beta, but appears to occur at the mRNA level. Nuclear run-off assays indicate that regulation occurs predominantly through a posttranscriptional mechanism(s), although a transcriptional process cannot be ruled out. Normally, CD16 appears on only a small population of circulating monocytes, however, expression is apparent on the majority of mature tissue and inflammatory macrophages likely due to the release of TGF-beta in these sites. Inasmuch as this receptor binds immune complexes and opsonized particles, it is associated with enhanced immunophagocytosis. Suppression of CD16 expression and its ability to suppress a number of other monocyte functions suggests that IL-4 may play an important role in the resolution of inflammatory and tissue repair responses.