Retinal pigment epithelial cells (RPE) in vitro display many characteristics typical of antigen-presenting cells (APC) yet are poor inducers of lymphocyte proliferation and in vivo appear to remain MHC class II negative within the acute inflammatory chorioretinal lesions associated with experimental autoimmune uveoretinitis. In an in vitro assay system designed to mimic the in vivo situation as closely as possible, RPE cells profoundly suppressed lymphocyte proliferation to antigen, mitogen, and IL-2 even in the presence of exogenous APC. RPE immunosuppression was found to comprise both soluble and membrane-bound components and to be reversible as lymphocytes could be restimulated by thymocytes after coculture on RPE cells. Indomethacin restored proliferative responses of cocultured lymphocytes to specific antigen and mitogen indicating that the soluble component of suppression was mediated in part by PGE2 production by the RPE cells. Constitutive production of PGE2 by RPE cells was found to be low (approximately 10(-9) M), but increased to high levels (approximately 10(-6) M) in coculture with activated lymphocytes. In addition, antigen-specific primed lymphocyte responses during coculture with RPE were enhanced in the presence of indomethacin compared to similar splenocyte responses in the absence of RPE cells. However, indomethacin did not reverse RPE inhibition of IL-2-driven lymphocyte proliferation, and the failure of lymphocyte proliferation could not be attributed to TGF beta production by RPE cells, indicating that other RPE cell-immunosuppressive mechanisms were involved. Trypsin pretreatment of RPE cell monolayers removed an as yet unidentified inhibitory factor present on the RPE cell membrane and in combination with indomethacin enabled RPE cells to function as antigen-presenting cells.