We have studied the function of interferon-gamma (IFN-γ) on human B cell proliferation and differentiation. When B cell subpopulations were separated by Percoll gradient centrifugation and stimulated by Staphylococcus aureus Cowan I (SAC), these subpopulations responded differently to lymphokines. Small B cells (60/80% Percell) were stimulated to proliferate by IFN-γ alone. Large B cells (50/60% Percoll) did not respond to IFN-γ but proliferated in response to B cell growth factor (BCGF) free of interleukin-2 (IL-2) and IFN-γ. Although IFN-γ alone could not induce the differentiation of SAC-activated B cells and did not support the growth of large B cells, it enhanced the proliferation and differentiation of both subpopulations in the presence of BCGF and IL-2. Also, IFN-γ induced the expression of IL-2 receptor on B cells. Pretreatment of B cells with IFN-γ for 48 h had a minor effect on the proliferation but significantly enhanced the differentiation in the presence of BCGF and IL-2; therefore, IFN-γ may act as a differentiation factor. However, in a late stage of culture, IFN-γ inhibited B cell differentiation. Our experimental data suggest that IFN-γ is a growth factor for distinct subpopulation of SAC-activated human B cells and enhances the proliferation and differentiation and the expression of IL-2 receptor on B cells.