The authors have previously demonstrated that lipids from Mycobacterium leprae cell walls inhibit macrophage functions and are endowed with anti-inflammatory properties in vivo. To investigate these observations further, the authors describe here the influence of dead M. leprae or of the lipids extracted from the cell wall of the mycobacterium, enclosed in liposomes, on the phagocytic, oxidative respiratory burst and tumouricidal ability of bone marrow derived macrophages in vitro. Dead M. leprae or its cell wall lipids abrogated the oxidative respiratory burst and phagocytic ability of mouse bone marrow derived macrophages. A dose-dependent inhibitory effect of the bacterial lipid extract on tumour cell killing by lipopolysaccharide (LPS)-activated bone marrow derived macrophages was demonstrated. However, when delipidated M. leprae was added to cultures of bone marrow derived macrophages, immune phagocytosis and superoxide production was up-regulated. Mycobacterium leprae or its lipids did not appear to be toxic to those cells assayed by the MTT (methyl thiazol tetrazolium) test. These data, added to our preceding observations, support the hypothesis that the down-regulatory activity of M. leprae wall lipids on macrophage function might be one of the evasive mechanisms of the bacterium to enable it to perpetuate itself in the host tissues.