Tumor necrosis factor (TNF), an endotoxin-induced macrophage monokine, is known for its cytotoxic and cytostatic effect on some tumor cell lines. Here we show that highly purified recombinant TNF, in combination with interleukin 2 (IL2), can induce IL2 receptor expression and cytolytic activity in a rat x mouse T cell hybrid (PC60). Previously, it was shown that IL1 had a similar effect on PC60 cells. The ability of TNF to co-induce IL2 receptor expression suggests that it may play a role in the activation of certain lymphoid effector cells. This observation augments the growing list of biological activities attributed to TNF.