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In this study we investigated the pathogenesis of the lymphoproliferative response in the chronic-active visna maedi virus-induced inflammatory lesions. Viral RNA expression was confined to macrophages, but only in tissues showing inflammatory lesions. A persistent and high level of Ia antigen expression was seen in macrophage-like cells in the inflammatory lesions, and the amounts of viral RNA and Ia expression were closely correlated. A small subpopulation of macrophages contained both viral RNA and Ia antigen, and these were found in greatest number in the lung. In vitro experiments showed that a lentivirus-induced interferon (LV-IFN) could induce Ia antigens in normal sheep spleen and lymph node cells as well as in a transformed sheep macrophage cell line. Ia antigen expression in macrophages was transient in the absence of a continuing IFN stimulus and persisted for at least 2 wk in the presence of LV-IFN. LV-IFN also restricted viral replication in macrophages. It is suggested that LV-IFN induced by the inflammatory cells in visna-maedi lesions may induce Ia antigen expression in macrophages, thereby indirectly causing the lymphoproliferative response and restricted virus replication.