The effect of interferon-gamma (IFN-gamma) on epidermal growth factor (EGF) receptor binding and the proliferation of normal and simian virus 40 (SV40)-transformed human fibroblast cells was compared under identical culture conditions. IFN-gamma induced an enhancement of EGF binding to normal cells, whereas it decreased the EGF binding to SV40-transformed cells. Half-maximal enhancement occurred at 72 h after the normal cells were exposed to 10 U/ml of IFN-gamma, and maximal stimulation was obtained at about 10(2) U/ml of IFN-gamma at 72 h. On the other hand, half-maximal reduction was observed for SV40-transformed cells at less than 10 U/ml of IFN-gamma at 72 h, and maximal reduction was obtained at around 10(3) U/ml of IFN-gamma at 72 h. Scatchard analysis indicated that the number of EGF binding sites of normal and SV40-transformed cells was calculated to be 1.6 x 10(5) and 0.88 x 10(5) per cell, respectively, and was little altered by IFN-gamma treatment. The dissociation constant (K(d)) of normal cells, however, decreased from 4.5 nM (control) to 2.0 nM (IFN-gamma-treated), while the K(d) of SV40-transformed cells increased from 3.6 nM (control) to 17.0 nM (IFN-gamma-treated). The immunoprecipitation of I-125-labeled EGF-bound EGF receptors with anti-receptor antiserum indicated that a 72-h IFN-gamma treatment did not induce a conformational alteration in the EGF receptors of both normal and transformed cells. The DNA synthesis of normal cells was enhanced by EGF, and IFN-gamma treatment potentiated the effect of EGF on DNA synthesis, probably due to the increased binding affinity of EGF to the cells. On the other hand, IFN-gamma reduced DNA synthesis in transformed cells. The above contrasting results indicate that SV40 transformation may cause alterations in the membrane structure of the cells, and hence IFN-gamma treatment might induce differential modulation between normal and transformed cells of the membrane structure surrounding the EGF receptors.