Thalidomide is an effective immunomodulatory drug in man, but its mechanism of action remains unclear. We hypothesized that, in addition to its reported inhibitory effects on production of monocyte-derived tumour necrosis factor-alpha (TNF-alpha), thalidomide might be effective at the level of Th immunoregulation. In a comparative study with the immunosuppressant cyclosporin A, we have demonstrated a potent and specific effect of thalidomide on cytokine production relating to the distinct Th1 and Th2 subsets. It induced and enhanced the production of IL-4 and IL-5 and, at the same dose (1000 ng/ml), significantly inhibited interferon-gamma (IFN-gamma) production in phytohaemagglutinin (PHA)-stimulated human peripheral blood mononuclear cell (PBMC) cultures. Stimulation of PBMC with recall antigen (streptokinase:streptodornase (SKSD)) at 144 h in the absence of thalidomide resulted in a predominantly Th1 response, with the production of IFN-gamma and IL-2. Thalidomide switched this response from a Th1 to a Th2 type. The effect was most pronounced at 1000 ng/ml thalidomide, where inhibition of IFN-gamma and enhancement of IL-4 production was maximal. In unstimulated cultures thalidomide alone induced IL-4 production. Cyclosporin A, in contrast, inhibited both Th1 and Th2 cytokine production by PHA-stimulated PBMC. Time course data from thalidomide-treated cultures revealed that the augmented IL-4 production diminished as the culture time increased, whereas IFN-gamma production was significantly increased. This response might be due to activation-induced apoptosis of Th2 cells or the induction of Th2 cell anergy, in the continued presence of stimulating agents, with the emergence of IFN-gamma-secreting Th1 cells when Th2 antagonism declines. The effects of thalidomide and related compounds may enhance our understanding of the mechanisms of T helper cell selection, offer the possibility of controlled therapeutic switching between Th1 and Th2 responses, and may lead to a rational approach for the treatment of some T cell-mediated immunological disorders.