Recombinant gamma-interferon (rIFN-gamma) induced or augmented the expression of HLA-DR class II antigens on melanocytes isolated from newborn foreskin, from congenital, common acquired, and dysplastic nevi, and from primary and metastatic melanoma. The stimulatory effect of rIFN-gamma on HLA-DR antigen expression was suppressed by the addition of the phorbol ester TPA or its analog PDBu to the culture medium. Whereas rIFN-gamma did not significantly alter the expression of melanoma-associated, non-class II antigens on melanoma cells, there was a marked decrease in the expression of antigens associated with nevus cells. In addition, rIFN-gamma stimulated shedding of antigens. Increased antigen shedding was most apparent for an intracytoplasmic melanoma-associated protein of 80kd, followed by the ganglioside GD2 and by an alkali labile ganglioside. The simultaneous stimulation of class II antigen expression and shedding of melanoma-associated antigens as well as suppression of nevus-associated antigen expression could play an important role in the host immune response to premalignant and malignant melanocytic lesions.