Human alveolar macrophages release in vitro a factor that inhibits both random migration and chemotaxis of human polymorphonuclear neutrophils (PMN). This factor is not cytotoxic and is recovered in culture supernatants of alveolar cells from most nonsmoking normal subjects. The inhibitor can be detected 30 min after cell cultures are established and is still produced after 24 h in culture. Its release was inhibited by cycloheximide. When supernatants are separated by molecular sieving (I-60 Waters HPLC column), most of the inhibitory activity is recovered in the low-molecular-weight fractions of the chromatogram (less than 1,000 D). The inhibitor has a broad spectrum of activity against known chemoattractants in that it reduces significantly the chemotaxis of PMN induced by the formyl peptide FMLP, by the complement fragment C5a, and by leukotriene B4; it also decreases the chemotactic activity associated with a monocyte-derived interleukin 1 preparation and the chemotactic activity derived from alveolar macrophage culture supernatants. The inhibitory factor is partially heat labile, is sensitive to aminopeptidase M, and is nonpolar. Both phorbol myristate acetate (PMA) and FMLP-induced superoxide release by PMN are diminished significantly in the presence of this inhibitory factor (p less than 0.01 for PMA and p less than 0.05 for FMLP). The inhibitor also reduces monocyte chemotaxis but has no effect on monocyte random migration. Finally, studies with [3H]FMLP indicate that this inhibitor does not act at the site of receptor binding on PMN. Thus, human alveolar macrophages can release in vitro both neutrophil chemotactic factors and an apparent neutrophil-inhibiting factor that may modulate positively and negatively the movement and the respiratory burst of neutrophils in the alveolar space.