Challenge of macrophages with DNA containing an internal CpG motif results in IL-12 p40 secretion. In the presence of IFN-γ CpG DNA induces more p40 secretion than does LPS. In the RAW 264 macrophage cell line, both CpG DNA and LPS activate a p40 promoter-reporter construct, and the promoter response to either agent is augmented 2- to 5-fold by IFN-γ. While either LPS or CpG DNA induces p40 promoter activity, only CpG DNA induces an increase in p40 mRNA or protein secretion. Even though IFN-γ augmented LPS- driven p40 promoter activity in RAW 264 cells, the combination of IFN-γ and LPS induced less p40 mRNA or protein secretion than the combination of IFN- γ and CpG DNA. The ability of IFN-γ to augment LPS or CpG DNA-induced p40 promoter activation was observed with truncation mutants of the IL-12 promoter containing as few as 250 bp 5' of the TATA box. Although LPS alone is a poor inducer of p40 transcription, both LPS and CpG DNA induce similar nuclear translocation of NF-κB. This binding is not augmented by costimulation with IFN-γ. Thus, CpG DNA induces p40 transcription by a mechanism that includes NF-κB translocation; however, CpG DNA appears to induce other factor(s) necessary for p40 transcription. These results illustrate fundamental differences between CpG DNA and LPS with respect to activation of IL-12 p40 secretion.