The role of HLA class II Antigens in the control of the immune response is determined not only by the genetic polymorphism of these molecules, but also by their density on the cell surface. It is therefore essential to identify the signals that modulate HLA Class II gene activity in normal and neoplastic cells. We have purified a cytokine (IK factor, 19 kDa) secreted by the leukemic cell line K562 and several cancer cells, which inhibits HLA Class II antigen induction by IFN-gamma. We produced specific mAbs which antagonize the biological effect of IK in colon carcinoma Colo 205 cells induced to express HLA-DR molecules by IFN-gamma. Moreover, in Colo 205, HLA-DR can also be induced by the protein synthesis inhibitor Cycloheximide (0.1 micrograms ml-1); and addition of IK factor almost completely abolishes HLA class II expression. We have also performed the cloning and the sequencing of a specific cDNA. This probe recognizes a 2.1 Kb mRNA in different cell types. The nucleotide sequence exhibits no homologies with known cytokines. IK gene localization shows that it maps on chromosome 2p15-p14. The transient transfection of the cDNA in COS cells induces the secretion of a biologically active 19 kDa protein which is recognized in Western blot by 1C5B11 blocking mAb. This paper reports the characterization of a new cytokine down-regulating HLA class II Antigens, whose analysis will help to better understand HLA class II gene regulation and the mechanism of escape from immunorecognition in cancer cells.