After the cloning of murine cytokine synthesis inhibitory factor, it was recognized that a homologous open reading frame was encoded within the Epstein-Barr virus (human herpes virus 4). This viral protein has now been termed viral interleukin 10 (vlL-10) to reflect its protein sequence homology to "cellular" Ibl0 (clbl0, either murine or human Ibl0). It is now widely accepted that vlL-10 shares many functions with clL-10, principally, the ability to enhance survival of newly infected B cells and to diminish the production of IFN-γ and II.-2 during ongoing immune reactions. The immunomodulatory effect of locally secreted vlbl0 and murine Ibl0 (mlbl0) was examined in tumor models using CL8-1 (a BL6 melanoma cell line transfected with the H-2K b class I gene) in syngeneic animals. Although parental BL6 tumor cells grow in immunocompetent syngeneic hosts, CL8-1 are rejected. To achieve local secretion of vlL-10, we generated vlbl0 retroviral vectors. While nontransduced CL8-1 cells (1 × 104) failed to grow when injected intradermally in C57BL/6 mice, CL8-1 cells (1 × 104) transduced with vlL-10 formed palpable tumors and eventually killed 80% of injected animals. Suppression of tumor rejection was also noted when CL8-1 tumors with or without vlL-10 transfection were admixed with syngeneic vlL-10-transfected fibroblasts and inoculated. Since the in vitro proliferation of the tumor was not altered after transduction with the vlL-10 gene and injection of vlD10--transduced CL8-1 does not affect the rejection of nontransduced CL8-1 inoculated at a distant site, local vlL-10 secretion appears to suppress the process of immune rejection of the target cells in a dose-dependent manner. Similar results were observed for the H-2 b MCA105 sarcoma tumor model in allogeneic BALB/c mice (H-2d). Although all animals that received nontransfected MCA105 rapidly rejected these tumors, MCA105 sarcomas transfected with vlL-10 remained palpable for up to 37 d. The local immunosuppressive effect of gene-delivered vlL-10 could be neutralized by anti-human II.-10 monoclonal antibody or could be reversed by the systemic administration of II.-2 or Ib12. In marked contrast, mlL-10 transfection of CL8-1 significantly suppressed tumor growth and frequently led to the rejection of tumor. Similar results were obtained for the murine tumor cell lines MC38 and MCA102. These results contrast the immunologic effects of vlL-10 and clL-10 and argue for divergence in the function of the vitally captured gene, which is presumably the result of altered interaction with one of the two derived II.-10 receptors. The present study, along with our recent study showing prolonged survival of cardiac allografts transduced with retroviral vlL-10, suggests that local vIL-10, but not mIL-10, secretion can suppress immune reactivity in both the syngeneic and allogeneic settings.