LAF (lymphocyte-activating factor), a nondialyzable, nonmitogenic substance obtained from rat macrophage-conditioned medium, potentiates the response of LNC to the T cell mitogen PHA and substitutes for macrophages in the DNA synthetic response of mitogen-stimulated, macrophage-depleted (Mφ-) LNC. The active factor has a m.w. between 50,000 and 100,000 as determined by membrane filtration. LAF acts between 12 and 24 hr after mitogen addition, apparently stimulating lymphocytes in G1 to enter S phase of the cell cycle. It induces an increase in the number of stimulated LNC synthesizing DNA without affecting the amount of DNA synthesized, as demonstrated by autoradiographic analysis. Its action is not due to generally enhanced cell survival, to prolongation of the S phase, to a mercaptoethanol effect, or to presence of free cold nucleotides in the LAF preparation. The LAF effect on mitogen-stimulated LNC or Mφ-LNC is associated with a rise in cGMP, starting at 12 to 16 hours, and reaching as much as 10 times normal levels by 24 hr. Addition of exogenous DBcGMP (10-7 M), agents that activate guanylate cyclase such as carbachol (10-8 M), or imidazole, a cGMP phosphodiesterase inhibitor (10-9 M), to PHA-stimulated Mφ-LNC mimics the LAF effect, maximally if the reagents are added 12 hr after mitogen. Inclusion of EGTA, an effective chelator of Ca++ (plus excess Mg++) between 12 and 26 hr of culture ablates both the LAF effect and the concomitant rise in cGMP. The evidence supports the conclusion that LAF acts by raising cGMP in G1 cells.