The inflammatory neuropeptide substance P acted as a costimulant for macrophage CSF-1-induced clonal proliferation of murine marrow-derived two signal-dependent mononuclear phagocyte progenitors. Substance P had no effect on clonal proliferation by progenitors responding solely to CSF-1. Substance P fragment 2-11 had no costimulatory activity; however, SP fragment 1-4 retained the full activity of the parent undecapeptide. Fragment 1-4 (ARG-PRO-LYS-PRO), a peptide containing a PRO residue between two positive charges, is a tuftsin-like (THR-LYS-PRO-ARG) tetrapeptide, and tuftsin exerted an identical costimulatory effect. Substance P, SP:1-4, and tuftsin were optimally effective as costimulants at 10(-7) to 10(-6) M. (ALA1)-tuftsin, an inhibitory analog of tuftsin, was a potent negative regulator of two signal-dependent colony formation. (ALA1)-tuftsin at concentrations less than or equal to 10(-9) M exerted dose-dependent inhibition of the positive effects of optimal concentrations of all of the co-stimulants tested, including bacterial LPS. The inhibitory tetrapeptide was equivalent in activity to ferritin, an established inhibitor of two signal-dependent colony formation. The results indicated that SP may influence myelopoiesis in addition to its other inflammatory and immunopotentiating properties. In addition, a potentially valuable modulator of SP and LPS responses in this system, (ALA1)-tuftsin, was identified.