The hypercalcemia of various granulomatoses is caused by endogenous 1,25-dihydroxyvitamin D [1,25-(OH)₂D₃] overproduction by disease-activated macrophages. The inability of 1,25(OH)₂D₃ to suppress its synthesis in macrophages contrasts with the tight control of its production in macrophage precursors, peripheral blood monocytes (PBM). We examined whether 1,25(OH)₂D₃ resistance develops as PBM differentiate to macrophages or with macrophage activation. Normal human pulmonary alveolar macrophages (PAM) are less sensitive to 1,25(OH)₂D₃ than PBM, despite similar vitamin D receptor content; however, both PBM and PAM respond to exogenous 1,25-(OH)₂D₃ by inhibiting 1,25(OH)₂D₃ synthesis and inducing 1,25(OH)₂D₃ degradation through enhancement of 24-hydroxylase mRNA levels and activity. The human monocytic cell line THP-1 mimics PAM in 1,25(OH)₂D₃ synthesis and sensitivity to exogenous 1,25(OH)₂D₃. We utilized THP-1 cells to examine the response to 1,25(OH)₂D₃ with macrophage activation. Activation of THP-1 cells with γ-interferon (γ-IFN) enhances 1,25(OH)₂D₃ synthesis 30-fold, blocks 1,25-(OH)₂D₃ suppression of its synthesis, and reduces by 42.2% 1,25-(OH)₂D₃ induction of its degradation. The antagonistic effects of γ-IFN are not merely restricted to enzymatic activities. In THP-1 cells and in normal PBM,γ -IFN inhibits 1,25-(OH)₂D₃ induction of 24-hydroxylase mRNA levels without reducing mRNA stability, suggestingγ -IFN inhibition of 1,25(OH)₂D₃ transactivating function. These results explain 1,25(OH)₂D₃ overproduction in granulomatoses and demonstrate potent inhibition by γ-IFN of 1,25(OH)₂D₃ action in immune cells.