Macrophage function in neonates was dissected into four components: antigen uptake and catabolism, cytotoxicity, antigen presentation, and the production of the lymphostimulatory molecule interleukin-1 (also called thymocyte mitogenic protein or lymphocyte-activating factor). The uptake and catabolism of 125I-labeled Listeria monocytogenes was equivalent in macrophages from adult and neonatal mice. However, interactions between macrophages from neonates, heat-killed Listeria organisms, and immune T lymphocytes were impaired, and no cytocidal macrophages capable of killing tumor cells were generated. Previous studies with cells from adult mice had established that the development of cytocidal macrophages required Ia-bearing, antigen-presenting macrophages and histocompatibility at I-A between macrophages and T cells. To circumvent this requirement for antigen-presenting macrophages, an assay was used in which lymphokine was added directly to the macrophages from neonates. Strong cytocidal activity resulted. Thus, our studies confirmed that macrophages from neonates present antigen poorly but can acquire cytocidal function provided that the need for antigen-presenting function is bypassed. Similar conclusions were reached for the secretion of interleukin-1. Macrophages from neonates spontaneously secreted as much mediator as macrophages from adults, and the secretion was increased after the ingestion of heat-killed Listeria organisms or endotoxin. However, the marked increase in interleukin-1 production that follows antigen-macrophage-lymphocyte interaction was best seen in macrophages from adults. Macrophages from neonates could be activated to ingest C3b-coated sheep erythrocytes.