Subpopulations of human peripheral blood polymorphonuclear neutrophils (PMN) differing in functional capacity were separated by a rosetting procedure by using rabbit IgG antibody-coated sheep erythrocytes (EA). EA+ and EA- populations of PMN both contained lactoferrin (LF) as determined by radioimmunoassay. However, only LF (10(-16) to 10(-6) M) obtained from EA+ (= FC receptor (FcR)+) PMN was able to suppress the production of granulocyte-macrophage colony stimulatory activity derived from human monocytes. LF from EA- PMN was inactive at concentrations as high as 10(-5) M. Extracts of EA- PMN contained proteolytic enzymes, not apparent in FcR+ PMN, that inactivated the inhibitory activity of LF obtained from FcR+ PMN. These results were substantiated by immunofluorescence studies. LF from FcR+ PMN bound to monocytes whereas LF from EA- PMN demonstrated negligible binding to the monocytes and extracts from EA- PMN drastically decreased the capability of LF obtained from FcR+ PMN to bind to monocytes. These studies demonstrate functional heterogeneity of peripheral blood PMN and suggest a role for PMN subpopulations in the regulation of myelopoiesis.