Bleomycin (BLM) has been successfully used to treat a number of human neoplasms. The main toxicity associated with BLM therapy is an acute pulmonary inflammation that can culminate in diffuse chronic fibrosis. The effect of BLM-induced pulmonary inflammation on the cytostatic activity of alveolar macrophages (AM) was investigated using AM obtained from rats that had been previously treated with BLM. Bronchoalveolar lavage fluid was collected at selected time intervals following a single fibrogenic dose of intratracheally administered BLM (3.6 mg/kg). AM obtained 12 to 72 h following intratracheal BLM (BLM-AM) caused cytostasis of murine leukemia L1210 cells in co-culture, whereas AM obtained from saline-treated controls were not cytostatic. These results indicate that the growth-inhibitory activity of the AM was related to the pulmonary inflammation. Cytostatic activity in control AM could be induced by in vitro exposure to lipopolysaccharide (5 micrograms). When RBC were added to the AM-L1210 co-culture, the cytostatic activity of the BLM-AM was abrogated. The fact that chemical treatment of the RBC with sodium nitrite and potassium cyanide or N-ethylmaleimide did not alter the ability of the RBC to abrogate AM cytostatic activity suggests that the RBC is not acting as a scavenger of oxygen radicals. In contrast, the addition of FeSO4 to the AM-L1210 co-culture mimicked the effect of RBC addition. Aconitase, an iron-sulfur-containing enzyme necessary for mitochondrial respiration, is decreased in L1210 cells that have been co-cultured with BLM-AM but not when the co-cultures also contain RBC. These results suggest that (a) pulmonary inflammation induces cytostatic activity in AM, (b) the alteration of iron homeostasis plays an important role in this cytostatic process, and (c) RBC can prevent this cytostatic activity.