Alveolar macrophages have the ability to downregulate immune processes in vitro. We have recently suggested the presence of interleukin-1 (IL-1) inhibitors in the supernatants of human bronchoalveolar lavage cells from patients with idiopathic pulmonary fibrosis or sarcoidosis. In the present study, we further analyze the cellular origin and the biologic properties of a 20- to 25-kD IL-1 inhibitor spontaneously produced by cultured human alveolar macrophages (AM). The inhibitor blocks IL-1-induced prostaglandin E2 production by human fibroblasts and the IL-1-related increase of phytohemagglutinin-induced murine thymocyte proliferation. After rigorous IL-1 alpha and IL-1 beta depletion, supernatants of lung macrophages specifically block the binding of IL-1 to its receptor on the murine thymoma cell line EL4-6.1 in a dose-dependent manner. These results indicate that AM from both normal donors and patients produce a specific IL-1 inhibitor that may be of importance in protecting the alveolar environment from the deleterious effects of excessive IL-1 production.