Tumor necrosis factor-alpha (TNF-alpha) is a potent pro-inflammatory cytokine and mediator of the inflammatory response. It has been implicated in the pathogenesis of many inflammatory disorders, including rheumatoid arthritis (RA), septic shock, and Crohn's disease. Using a specific anti-human TNF-alpha antibody we detected immunoreactivity for this cytokine in the cytoplasm of inflammatory cells in several chronic inflammatory disorders, including RA, scleritis, and polyarteritis nodosa. These cells were identified predominantly as IgG-expressing plasma cells. Lymph nodes from patients with Hodgkin's lymphoma and breast cancer, but not from control subjects, were also found to contain TNF-alpha-positive plasma cells. Cultured EBV-B lymphocytes and a human plasma cell line (ARH-77) when stimulated with phorbol myristate acetate demonstrated cytoplasmic TNF-alpha immunoreactivity. Western blot analysis of cell membranes and conditioned media from both cell types revealed the presence of the 26-kDa membrane-bound from and the 17-kDa soluble from of TNF-alpha, respectively. TNF-alpha was quantitated by enzyme-linked immunosorbent assay and found to be biologically active as determined by the L929 cytotoxicity assay. This is the first demonstration that plasma cells may be capable of modulating immune and inflammatory responses, not only by antibody production, but also by their secretion of a key inflammatory mediator, TNF-alpha.