TNFα is an important pro-inflammatory cytokine released by macrophages in response to various stimuli. The immunomodulatory effects of exogenous surfactant have been reported. Our previous studies indicate that Survanta® inhibits TNFα release from RAW 264.7, murine macrophages. We hypothesized that surfactant phospholipid, Dipalmytoyl, Phosphatidyl Choline (DPPC) played a major role in this suppression, since Survanta® does not contain any SP-A which is the other important component responsible for immunomodulation. We also studied luminol-induced chemiluminescence (LCL) activity from these macrophages and the effect of DPPC on LCL to understand the free oxygen radical production in the presence of various stimuli and surfactant phospholipids. We stimulated RAW 264.7 murine macrophages(106 cells/ml) with LPS (lipopolysaccharide)(10ng/ml,100ng/ml) and heat-killed Group B streptococci (GBS, 106cfu/ml) before and after incubation with DPPC (1mg/ml, 2mg/ml). The macrophages were stimulated for 16 hours at 37°C and 5% CO2 and supernatants were frozen at -70°C. TNFα was assayed using ELISA technique with a murine TNFα mini-kit(Endogen Inc.). In a different set of experiments, LCL was measured using a Tri-carb liquid scintillation analyzer. We incubated the macrophages(106cells/ml) with and without DPPC (2mg/ml) for 16 hours and then stimulated with PMA (phorbol myristate acetate)(10ng/ml) and GBS 106cfu/ml; luminol (1.44 mmol/l) was added to detect the LCL. Viability of macrophages remained unchanged after incubation with DPPC as determined by Trypan blue method. We found that murine macrophages released TNFα when stimulated with LPS (10ng, 100ng) and heat-killed GBS 106 cfu/ml. This release was significantly suppressed when incubated with 2mg/ml DPPC(p<.05), but only slightly suppressed with 1mg/ml DPPC. Conversely the LCL activity was higher in the macrophages incubated with DPPC (2mg/ml) as compared to macrophages incubated in plain media. Both PMA and GBS induced LCL which was maximum at 10 minutes after stimulation but decreased gradually to baseline by one hour. LCL activity was significantly higher in stimulated macrophages when pre-incubated with DPPC. The macrophages stimulated with PMA gave a higher response than GBS. We conclude that DPPC in exogenous surfactant suppress the release of TNFα from murine macrophages when stimulated by LPS and heat-killed GBS in a dose-dependent manner, but increases the LCL activity from both unstimulated and stimulated macrophages.