Overexuberant production of tumour necrosis factor-alpha (TNF-alpha) by macrophages and other cells is thought to contribute to the development of permanent lung damage in many inflammatory conditions. There is a need for an agent, without the side-effects of corticosteroids, which can reduce the production of TNF-alpha by macrophages activated by disease. This study evaluated the effect of thalidomide on lipopolysaccharide (LPS)-induced TNF-alpha production by human alveolar macrophages obtained from patients with tuberculosis and a group of other diseases associated with macrophage activation. Alveolar macrophages obtained by bronchoalveolar lavage from 31 patients (tuberculosis = 12, sarcoidosis = 3, lung cancer = 5, chronic bronchitis = 5, pneumonia = 6) were stimulated with LPS alone or LPS in combination with either thalidomide or dexamethasone. Cell-associated TNF-alpha, as measured by immunochemistry, and TNF-alpha released by macrophages, as assessed by ELISA, were markedly increased when cells were incubated with LPS (P < 0.05), and both were decreased following addition of thalidomide (P < 0.05) or dexamethasone (P < 0.05) to amounts similar to those observed when macrophages were incubated with medium alone. Similarly, TNF-alpha mRNA as measured by in situ hybridization was increased following incubation with LPS (P < 0.05), but this increase was prevented by addition of thalidomide (P < 0.05) or dexamethasone (P < 0.05). The ability of thalidomide to reduce LPS-induced TNF-alpha production by alveolar macrophages was the same when cells from patients with tuberculosis (a disease associated with TNF-alpha production) and cells from patients with the other conditions were compared. The ability of thalidomide to reduce TNF-alpha production by human alveolar macrophages from patients with active lung disease suggests that thalidomide and its analogues may have potential as drugs to reduce TNF-alpha production in disease.