Multiple low dose streptozotocin (STZ) is believed to induce immunologically mediated islet cell necrosis. We sought to establish whether this agent also increased MHC expression, as has been reported for other diabetes models. STZ (40 mg/kg/day for 5 days) produced increased levels of both class I and II MHC products in kidney, liver, heart, and pancreas. Class I expression was induced in renal tubular cells, Kupffer cells, hepatocytes, occasional cardiac myocytes, and cells within the pancreatic islet. In contrast, class II products were increased in dendritic cells, renal tubules, and cells within the pancreatic islet. Steady state mRNA levels for class I, class II, and beta 2-microglobulin correlate closely with the level of MHC products measured by radiolabeled antibody binding, suggesting that changes in MHC expression reflect changes in gene transcription. The effect is T cell dependent and inhibitable by cyclosporine. IFN-gamma is an essential mediator of the MHC induction; administration of a neutralizing antibody blocks the increase in expression. Furthermore, this antibody attenuates the hyperglycemic response to STZ, demonstrating a pathogenic role for IFN-gamma in mediating beta cell damage. We conclude that the MHC induction observed after low dose STZ is due to immunologic mechanisms, in particular the release of lymphokines such as IFN-gamma from T cells. The release of IFN-gamma and changes in MHC expression may be relevant to the injury seen with this agent.