We have reported the isolation and characterization of three factor-dependent macrophage cell lines from bone marrow cells of C3H/HeNmice. We have since isolated a subclone, BDM-1W3, from one of these cell lines. We found previously that BDM-1W3has a different sensitivity to bacterial lipopolysaccharide (LPS) for growth than its parental cell line, BDM-1. In this report, we show that LPS inhibits BDM-1W3 phagocytosis of antibody-coated sheep erythrocytes (Fc-mediated phagocytosis), whereas it enhanced Fc-mediated phagocytosis by BDM-1. It was observed that a loss of Fc-receptor capacity parallels a loss of phagocytic activity in LPS-treated BDM-1W3cells. LPS stimulated phagocytosis of latex beads by BDM-1and BDM-1W3, suggesting that Fc-mediated phagocytosis and phagocytosis of latex beads differ in their regulatory mechanisms. When BDM-1 cells were cultured with LPS, they underwent drastic morphological changes, whereas LPS-treated BDM-1W3 cells did not change significantly. Gamma interferon enhanced FC-mediated phagocytosis by BDM-1, while it had no significant effect on that by BDM-1W3. These cell lines should be useful for studying signal transduction mechanisms in LPS-mediated macrophage activation.