Although administration of rIL-2 post-T depleted allogeneic bone marrow transplantation (TD-BMT) offers the prospect of augmenting immune reconstitution and thereby reducing the risks of infection and relapse, it has been unclear what direct or indirect effects this agent would have on the regenerating myeloid system. We find that addition of 200 IU or rIL-2 to patient lymphocytes obtained within 6 wk of TD-BMT results in a substantial (2 to 3 log) increase in INF-gamma secretion and the production of TNF. Cytokines present in supernatants obtained from IL-2-stimulated patient lymphocytes have two contrasting effects on myeloid cells from normal donors and from marrow recipients. They prime granulocytes for enhanced oxidative metabolism as measured by ability to generate chemiluminescence in response to FMLP, whereas IL-2 added directly to neutrophils has no effect. However, these IL-2-induced cytokines also act to inhibit myeloid progenitor growth and reduce granulocyte macrophage (GM) colony formation by a mean of 53%. Preincubation of supernatants with anti-IFN-gamma antibody partially abrogates both enhancement of granulocyte chemiluminescence and suppression of marrow CFU-GM. Addition of IL-2 directly to recipient marrow also produces inhibition, leading to a 25% reduction of GM-colony growth. This effect is not due to direct interaction between myeloid progenitor cells and IL-2, because it is completely abrogated by removal of CD8 and Leu-7+ lymphocytes from the marrow. Although the suppressive effects on marrow growth in vitro are of particular concern after BMT, the potential of IL-2 to promote granulocyte function, immune reconstitution, and anti-leukemic activity after TD-BMT justify further consideration of IL-2 therapy in this setting.