While it is well known that interferon-gamma (IFN gamma) and tumor necrosis factor-alpha (TNF alpha) play a role in the regulation of thyroid growth and differentiated functions, the cellular and molecular mechanisms involved in mediating the effects of IFN gamma and TNF alpha on thyroid function are unknown. In the present study, we used FRTL-5 rat thyroid cells to examine the effects of IFN gamma and TNF alpha on gene expression of transcription factor interferon regulatory factor-1 (IRF-1), which is involved in mediating the effects of these cytokines in a number of cell types. Northern blot analysis of FRTL-5 mRNA showed a single IRF-1 mRNA at 2.2 Kb. In quiescent FRTL-5 cells, IRF-1 mRNA levels were low but detectable by Northern analysis. Incubation of FRTL-5 cells with IFN gamma or TNF alpha resulted in a dose- and time-dependent increase in IRF-1 mRNA levels. We have shown that TNF-alpha and IFN-gamma act synergistically to block the TSH-induced increase in type I 5'-deiodinase(5'D-I) activity and 5'D-I gene expression in FRTL-5 rat thyroid cells. Incubation of FRTL-5 cells with IFN gamma and TNF alpha in combination, however, did not synergistically increase IRF-1 mRNA levels. Electrophoretic mobility shift assay (EMSA) revealed that IFN gamma induced the formation of a single complex to a IFN gamma activation site (GAS) probe in a dose dependent manner. Several lines of evidence suggest that TNF alpha activates transcription factor nuclear factor-kappa B (NF kappa B) through activation of protein kinase C (PKC) or the hydrolysis of sphingomyelin to ceramide in a number of cell types. Here we demonstrate that hydrolysis of sphingomyelin to ceramide by sphingomyelinase (SMase), but not activation of PKC by 12-O-tetradecanoylphorbol 13-acetate (TPA), was involved in the activation of NF kappa B in FRTL-5 cells. Similarly, hydrolysis of sphingomyelin to ceramide, but not activation of PKC, resulted in an increased in IRF-1 mRNA levels in FRTL-5 cells. The present data demonstrate that IFN gamma and TNF alpha increase IRF-1 mRNA levels in FRTL-5 cells through activation of GAS and NF kappa B binding proteins, respectively. Thus, our results suggest that upregulation of IRF-1 may play a role in mediating the effects of IFN gamma and TNF alpha on thyroid function. Our results also suggest that the induction of IRF-1 mRNA by IFN gamma and TNF alpha is not the cellular mechanism involved in the synergistic effect of these cytokines on thyroid function.