Liposome-encapsulated muramyl tripeptide phosphatidylethanolamine (L-MTP-PE) is a new biologic agent presently in clinical trials for metastatic osteosarcoma and melanoma. The mechanism of L-MTP-PE antitumor activity is linked to its activation of monocyte tumoricidal function. The purpose of this study was to determine whether L-MTP-PE affected the expression of cytokine genes in monocytes. Monocyte interleukin (IL)-1 alpha, IL-1 beta, IL-6, IL-8 and tumor necrosis factor (TNF)-alpha expression were all up-regulated after a 2-h incubation with L-MTP-PE. The increased expression of IL-1 alpha, IL-1 beta, IL-6 and IL-8 persisted up to 72 h. Increased TNF-alpha expression declined by 24 h. The kinetics of cytokine expression stimulated by L-MTP-PE were different from those seen after lipopolysaccharide (LPS) stimulation. Lipopolysaccharide stimulation caused a rapid increase in cytokine expression followed by a rapid decline. L-MTP-PE did not affect the expression of these cytokines in lymphocytes, nor did L-MTP-PE upregulate IL-2 expression in lymphocytes. The early up-regulation of all five cytokines was due to an increase in the transcriptional activity. Modification of mRNA stability was not detected at 2 h but was seen after a 24-h exposure to L-MTP-PE. The subsequent production and secretion of these cytokine proteins may play a role in L-MTP-PE antitumor activity.