Hairy cell leukemia (HCL) is a B cell tumor affecting the pre-plasma stage of B cell differentiation. Hairy cells produce B cell growth factor (BCGF)-related growth factor(s) and we have previously shown that low mol wt (LMW)-BCGF-induced proliferation of hairy cells is inhibited in vitro and in vivo by IFN-alpha. We therefore suggested that this effect might contribute to the exquisite sensitivity of HCL to IFN-alpha therapy. To elucidate the mechanism involved in the therapeutic effect of IFN-alpha, we have analyzed the pattern of phosphorylated proteins in hairy cells. We detected the presence of a hyperphosphorylated protein with a molecular mass of about 35 kDa. This protein was identified as the CD20 molecule (B1), which is a structurally unique phosphoprotein exclusively detected on B cells and expressed during most stages of B cell development. Incubation of hairy cells with mitogenic concentrations of LMW-BCGF induces an additional increase in CD20 protein phosphorylation. In contrast, preincubation of cells with IFN-alpha, but not IFN-gamma, decreases both basal and LMW-BCGF-induced CD20 phosphorylation. CD20 phosphorylation in hairy cells is also reduced after in vivo IFN-alpha administration. In contrast, in one case of a patient unresponsive to IFN-alpha therapy, CD20 phosphorylation is not altered by in vitro IFN-alpha treatment, whereas LMW-BCGF still elicits CD20 phosphorylation stimulation. Our results suggest that IFN-alpha may act in HCL, at least in part, by inhibiting leukemic cell proliferation via regulation of phosphorylation, since CD20 phosphorylation is thought to be associated with cellular proliferation. A model involving dysregulation of CD20 is discussed.