CD40 is a member of the tumor necrosis factor (TNF) receptor superfamily. CD40 expression on antigen-presenting cells (including macrophages and microglia) is crucial for T-cell activation. Aberrant expression of CD40 has been associated with autoimmune inflammatory diseases such as multiple sclerosis and rheumatoid arthritis. We have recently shown that the cytokine interferon (IFN)-γ is the most potent inducer of CD40 expression in macrophages and microglia, and this induction is mediated by the IFN-γ-activated transcription factor STAT-1α and constitutively expressed PU.1 and/or Spi-B. In this study, we have discovered that a major component of IFN-γ-induced CD40 expression involves the endogenous production of the cytokine TNF-α. The inclusion of anti-TNF-α-neutralizing antibody significantly inhibits IFN-γ-induced CD40 mRNA and CD40 promoter activity. IFN-γ-induced CD40 protein expression is attenuated in TNF-α-deficient microglia and can be restored with exogenous TNF-α. Site-directed mutagenesis studies demonstrate that three of the four NF-κB elements in the CD40 promoter are required for IFN-γ-induced CD40 promoter activity. IFN-γ treatment leads to the activation of NF-κB in a time-dependent manner, which is inhibited in the presence of anti-TNF-α-neutralizing antibody. These results indicate that IFN-γ-induced TNF-α production and subsequent NF-κB activation are integral parts of the mechanism of IFN-γ-induced CD40 expression.