The hypercalcemia of various granulomatoses is caused by endogenous 1,25-dihydroxyvitamin D [1,25-(OH)2(D3)] overproduction by disease-activated macrophages. The inability of 1,25(OH)(2)D-3 to suppress its synthesis in macrophages contrasts with the tight control of its production in macrophage precursors, peripheral blood monocytes (PBM). We examined whether 1,25(OH)(2)D-3 resistance develops as PBM differentiate to macrophages or with macrophage activation. Normal human pulmonary alveolar macrophages (PAM) are less sensitive to 1,25(OH)(2)D-3 than PBM, despite similar vitamin D receptor content; however, both PBM and PAM respond to exogenous 1,25-(OH)(2)D-3 by inhibiting 1,25(OH)(2)D-3 synthesis and inducing 1,25(OH)(2)D-3 degradation through enhancement of 24-hydroxylase mRNA levels and activity. The human monocytic cell Line THP-1 mimics PAM in 1,25(OH)(2)D-3 synthesis and sensitivity to exogenous 1,25(OH)(2)D-3. We utilized THP-1 cells to examine the response to 1,25(OH)(2)D-3 with macrophage activation. Activation of THP-1 cells with gamma-interferon (gamma-IFN) enhances 1,25(OH)(2)D-3 synthesis 30-fold, blocks 1,25-(OH)(2)D-3 suppression of its synthesis, and reduces by 42.2% 1,25-(OH)(2)D-3 induction of its degradation. The antagonistic effects of gamma-IFN are not merely restricted to enzymatic activities. In THP-1 cells and in normal PBM, gamma-IFN inhibits 1,25-(OH)(2)D-3 induction of 24-hydroxylase mRNA levels without reducing mRNA stability, suggesting gamma-IFN inhibition of 1,25(OH)(2)D-3 transactivating function. These results explain 1,25(OH)(2)D-3 overproduction in granulomatoses and demonstrate potent inhibition by gamma-IFN of 1,25(OH)(2)D-3 action in immune cells.