We recently described an IL-1 inhibitor found in urine of febrile patients. It is a 26-kDa glycoprotein that acts by blocking the binding of IL-1 to its receptor. In a search for a cell source for the urinary IL-1 inhibitor, we tested three promyelocytic cell lines, H-161, AML-193, and HL-60, for their ability to produce this protein. Under normal culture conditions none of these cell lines produce detectable IL-1 inhibitory activity. The H-161 cells were treated with differentiation-inducing agents, i.e., sodium butyrate, hemin, retinoic acid, DMSO, vitamin D3, and PMA alone or in combination with IL-1 alpha, IL-2, IL-3, IL-4, IL-5, IL-6, TNF-alpha, IFN-gamma, granulocyte-CSF, macrophage-CSF, granulocyte/macrophage-CSF (GM-CSF), and Con A and tested for the production of IL-1 inhibitor. Production of IL-1 inhibitor was detected in cell supernatant, when H-161 cells were differentiated to adherent macrophage-like cells under the influence of PMA followed by a second signal provided by GM-CSF. Treatment of the other two cell lines, AML-193 and HL-60, with PMA plus GM-CSF also yielded similar IL-1 inhibitor protein. Partial purified H-161-derived IL-1 inhibitor showed specific binding to IL-1R-bearing cells and blocked the binding of IL-1 to its receptor and is thus similar to the urinary-derived molecule. We conclude the GM-CSF provides a signal to adherent macrophage-like cells to become "inhibitory macrophages" and to produce a competitive inhibitor of IL-1.