Mice with homozygous inactivation of the gene encoding the suppressor of cytokine signaling-1 (SOCS-1) protein die within 21 days of birth with low body weight, fatty degeneration and necrosis of the liver, infiltration of the lung, pancreas, heart and skin by macrophages and granulocytes and a profound depletion of T- and B-lymphocytes. In the present study, SOCS-1 -/- mice were found to have a moderate neutrophilia, and reduced platelet and hematocrit levels. Replacement of the SOCS-1 gene by a lac-Z reporter gene allowed documentation by FACS sorting that at least a proportion of granulocyte-macrophage progenitor cells transcribe SOCS-1. Most hematopoietic progenitor cell frequencies were normal in -/- marrow as were the size and cellular content of colonies formed by -/- progenitor cells in response to various stimulating factors. However, there was an increased frequency of macrophage progenitor cells in -/- mice and, abnormally, one quarter of all progenitor cells were located in the liver. Progenitor cells from -/- mice were hyper-responsive to stimulation by GM-CSF but not by M-CSF or Multi-CSF (IL-3). Progenitor cells from -/- mice were also hypersensitive to inhibition by interferon-gamma (IFN-gamma), the degree of inhibition varying markedly with the stimulating factor used. The suppressive effects of IFN-gamma therefore appear to involve interactions with particular growth factor-initiated signals in -/- cells--interactions that are strongly modulated by the action of the SOCS-1 protein.