To study the effects of recombinant interferon-gamma (IFN-gamma) on pulmonary defenses in vivo, we measured Ia antigen expression by alveolar macrophages and whole-lung clearance of inhaled Legionella pneumophila in normal and corticosteroid-treated rats. We found that Ia antigen was expressed by 7, 29, 50, and 65% of alveolar macrophages harvested from normal rats 24 h after intratracheal administration of 0, 10(3), 10(4), or 10(5) U of IFN-gamma, respectively, and by 76% of alveolar macrophages harvested from corticosteroid-treated rats given 10(5) U of IFN-gamma. Corticosteroid-treated rats exhibited a marked impairment in the clearance of inhaled L. pneumophila, associated with diminished release of IFN-gamma by antigen-stimulated splenocytes and blunted up-regulation of Ia antigen by alveolar-exudate macrophages. Daily intratracheal injections of IFN-gamma starting 1 day before or 1 day after infection had little effect on bacterial clearance in normal rats but markedly reduced the intrapulmonary replication of L. pneumophila and the number of bronchoalveolar neutrophils in corticosteroid-treated animals. Intraperitoneally administered IFN-gamma had no effect on Ia expression by alveolar macrophages or on bacterial clearance. IFN-gamma may be useful in the treatment of intracellular infections when targeted to the site of infection in immunosuppressed hosts.