The biological response modifier OK-432 (Picibanil) (manufactured in Japan) is produced by lyophilization of cultures of the low virulent Su strain of group A Streptococcus pyogenes of human origin. This preparation has been shown to have multiple effects on the immune system and has been used as an anti-cancer therapeutic agent in man. It has been shown that OK-432 augments the cytotoxic activity of human natural killer (NK) cells. We have proposed that natural killer cytotoxic factors (NKCF) derived from NK cells play a role in the mechanism of NK cell-mediated cytotoxicity (CMC). The present study investigates the underlying mechanism of the OK-432-mediated enhancement of NK activity by determining whether OK-432 has an effect on the induction and activity of NKCF produced by NK cells. Treatment of peripheral blood lymphocytes (PBL) with OK-432 for 20 hr and wash resulted in significant augmentation of NK CMC and this enhancement was dependent on the concentration of OK-432 used. Coculture of the OK-432-treated PBL with U937 resulted in a several-fold enhanced production of NKCF in the supernatant. The NKCF produced were similar to those produced by untreated effector cells in that they had the same NK target specificity for lysis. The time kinetics of stimulation of PBL with OK-432 for optimal production of NKCF was found to be 8-12 hr. It was also observed that culture of OK-432-treated PBL in the absence of stimulator cells spontaneously release significant amounts of NKCF into the supernatant. The supernatant containing NKCF was tested for interleukin 2 (IL-2) activity using an IL-2-dependent HT-2 line. It was found that there was no direct correlation between the levels of NKCF and IL-2 activity. The results of this study demonstrate that OK-432 stimulates NK cells to produce NKCF in the presence or absence of stimulator cells. The optimum concentration of OK-432-induced augmentation of NK CMC paralleled that seen for optimum NKCF production, suggesting that one mode of action of OK432 is to enhance NKCF production in a manner reminiscent of IFN and IL-2. The results also point out that OK-432 acts by a mechanism independent of the action of IL-2.