Infection, simulated by lipopolysaccharide (LPS), is a potent stimulator of tumor necrosis factor-alpha (TNF-alpha) production, and hypoxia often synergizes with LPS to induce higher levels of the secreted cytokine. However, we show that in primary mouse peritoneal macrophages and in three mouse peritoneal macrophage cell lines (RAW 264.7, J774A.1, and PMJ-2R), hypoxia (O(2) < 0.3%) reduces the secretion of LPS-induced TNF-alpha (P < 0.01). In RAW 264.7 cells this reduction was not regulated transcriptionally as TNF-alpha mRNA levels remained unchanged. Rather, hypoxia and LPS reduced the intracellular levels of TNF-alpha by twofold (P < 0.01) by enhancing its degradation in the lysosomes and inhibiting its secretion via secretory lysosomes, as shown by confocal microscopy and verified by the use of the lysosome inhibitor Bafilomycin A1. In addition, although hypoxia did not change the accumulation of the soluble receptor TNF-RII, it increased its binding to the secreted TNF-alpha by twofold (P < 0.05). We suggest that these two posttranslational regulatory checkpoints coexist in hypoxia and may partially explain the reduced secretion and diminished biological activity of TNF-alpha in hypoxic peritoneal macrophages.