This paper demonstrates that CD40 is expressed on rheumatoid synovial pannus and primary fibroblast cell lines established from rheumatoid and osteoarthritic synovium as well as normal skin. Among various tested cytokines, interferon-gamma (IFN-gamma) and to a lower extent, tumour necrosis factor-alpha (TNF-alpha) were found to upregulate CD40 expression on fibroblasts. Synovial and skin fibroblasts cultured over CD40 Ligand transfected L cells (L-CD40 L) demonstrate a CD40 specific increase of DNA synthesis as measured by tritiated thymidine incorporation. Cell-cycle analysis and enumeration of viable cells further show that CD40 induced fibroblast proliferation. Costimulation with L-CD40 L and IFN-gamma resulted in maximal proliferation. Engagement of fibroblasts CD40 increased the IL-1-induced production of granulocyte macrophage-colony stimulating factor and macrophage inflammatory protein-1 alpha MIP-1 alpha. CD40 L activated fibroblasts showed decreased levels of CD40, but only marginal alterations of other cell-surface antigens. Taken together, the present results indicate that fibroblasts express functional CD40 and suggest a possible role of CD40 L expressing cells, such as activated T cells and mast cells, in the development of synovium hyperplasia.