Human monocytes cultured with granulocyte-macrophage colony-stimulating factor (GM-CSF) and IL-13 for 7 days differentiate into cells with the morphology and function of dendritic cells (DC). We have investigated the effect of IL-10 on this differentiation pathway. In the presence of IL-10 cells did not develop DC morphology, did not express CD1a and had lower levels of MHC class II. IL-10 promoted the differentiation of large cells with the morphology, cytochemistry and membrane phenotype of macrophages, including staining for nonspecific esterase and high levels of CD14, CD16 and CD68. The effect of IL-10 was dose dependent and was best appreciated when the cytokine was added at the initiation of the culture, as addition on day 3 was less inhibitory. When added to already differentiated DC on day 6, IL-10 caused only a modest reduction of MHC class II and CD1a expression, and no acquisition of the macrophage markers CD14, CD16 and CD68. Prolonged incubation up to 5 days with IL-10 did not induce a shift of differentiated DC to macrophages. On the other hand, the macrophages obtained by culturing for 7 days with GM-CSF+IL-13+IL-10 did not shift to DC upon removal of IL-10 for up to 3 days. Thus, the effect of IL-10 on monocyte differentiation, occurs only at the precursor level and confers an irreversible phenotype. From a functional point of view, cells cultured in the presence of IL-10 were poor stimulators of allogeneic cord blood T cells in mixed lymphocyte reaction (MLR) and presented tetanus toxin (TT) to specific T cell lines with much less efficiency than control DC. In contrast, IL-10-cultured DC showed 7 times greater endocytosis of FITC-dextran. This increased endocytosis was mostly mediated via the mannose receptor, as demonstrated by blocking with unlabeled mannose. In conclusion, IL-10 inhibits DC differentiation from monocytes and, in a substantial proportion of the cells, promotes the differentiation to mature macrophages. Intriguingly, IL-10 inhibits antigen presentation while it stimulates endocytic activity.