Previous work from our laboratory has demonstrated that major histocompatibility complex (MHC) antigens are expressed on cultured bovine luteal cells following exposure to the T lymphocyte-derived cytokine, interferon-gamma (IFN-gamma). In light of these actions of IFN-gamma, it was of interest to investigate the effects of this cytokine on other aspects of luteal function. Therefore, bovine luteal cells were cultured for 7 days in the presence or absence of IFN-gamma, and luteal progesterone (P4), prostaglandin F2-alpha (PGF2-alpha), and 6-keto-prostaglandin F1-alpha (6-keto-PGF1-alpha) production were evaluated. After a 24-h exposure to INF-alpha (100 U), both PGF2-alpha and 6-keto-PGF1-alpha production were decreased approximately 50% (p < 0.05). However, as time in cultured progressed, IFN-alpha markedly increased the synthesis of both prostaglandins approximately 400% above controls (p < 0.05). Stimulation of prostaglandin production by IFN-alpha was abrogated by the addition of exogenous P4. During the period of IFN-alpha-stimulated prostaglandin synthesis, LH-stimulated P4 production was inhibited by IFN-alpha treatment. However, the suppression of P4 production by IFN-alpha was not mediated by the increase in prostaglandins since concomitant treatment with indomethacin did not reverse the inhibition of steroidogenesis. These results suggest that IFN-gamma, in addition to an indirect role in promoting immune response mechanisms, may also directly affect luteal function by enhancing luteal prostaglandin synthesis and by inhibiting luteal steroidogenesis.