Monocytes and dendritic cells (DC) can be purified from fresh peripheral blood (PB) based on their expression of CD33, CD13, and CD14. Whereas DC can be identified as CD33+ CD14dim or CD13+CD14dim cells, monocytes can be identified as CD33+CD14bright or CD13+CD14bright cells. Rheumatoid synovial fluid (SF) and synovial tissue (ST) non-T cells were found to be enriched in CD33+CD14dim cells compared with PB. Whereas 4 to 14% of normal or rheumatoid PB non-T cells were CD33+ and CD14dim, in rheumatoid SF or ST these cells comprised 20 to 45% of non-T mononuclear cells. Synovial CD33+CD14dim cells assumed a typical dendritic morphology on in vitro culture. Freshly isolated CD33+CD14dim PB DC precursors express low levels of HLA-DQ, CD40, and B7, which increase after in vitro incubation. In contrast, freshly isolated SF DC constitutively expressed these markers, and increased densities of HLA-DR and MHC class I molecules. Rheumatoid SF DC showed a specifically enhanced ability to stimulate autologous PB T cells compared with PB DC, or PB or SF monocytes. PB DC or monocytes preincubated in granulocyte-macrophage-CSF, TNF-alpha, or both cytokines exhibited enhanced expression of HLA-DR. Furthermore, DC preincubated in both granulocyte-macrophage-CSF and TNF-alpha were better stimulators of the autologous MLR than DC preincubated in medium, or in either cytokine alone. The data indicate that DC are enriched in rheumatoid SF and ST, and display a more differentiated phenotype than PB DC. These results suggest that PB DC accumulate in the synovium where they undergo phenotypic and functional differentiation in situ, which may be mediated by local cytokines. DC may play an important role in the ongoing presentation of antigen to autoreactive T cells in RA synovium.