Recombinant human interferon-beta 2 was produced in Escherichia coli by direct expression of cDNA encoding the mature protein sequence. At concentrations that stimulate DNA synthesis and growth in B-cell hybridomas and plasmacytomas, the cytokine was found to exert a strong inhibition on the growth of a number of carcinoma and leukemia/lymphoma cell lines. This antigrowth effect was observed in clonogenic assays and by measurements of cell number and thymidine incorporation in growing cultures. The effect was blocked by antibodies to a synthetic peptide from the N terminus of the molecule. Normal diploid fibroblasts were inhibited at concentrations higher than those needed for breast carcinoma cells.