Tumor burden has been shown to induce a variety of phenotypic and functional changes in the cellular constituents of the host's immune system. These changes have been implicated as mechanisms by which tumors avoid rejection. Studies of BALB/c mice bearing a D1‐DMBA‐3 mammary adenocarcinoma showed alterations of the splenocyte populations. There was a five‐fold increase of macrophages (Mφ) that were phenotypically and functionally analyzed to establish their role in tumor‐induced modifications of the host's immune response. Monoclonal antibody staining defined a Mac‐1⁺2⁺ population which comprised up to 20% of the splenocytes in tumor‐bearers (TB), but is negligible in spleens from normal mice. These Mao‐1⁺2⁺ Mφ were found to mediate down‐regulation of both polyclonal and antigen‐specific T and B cell responses in vitro and in vivo. Although B cell responses were suppressed via prostaglandin E₂ (PGE₂) production by the TB Mφ, T cell responses were relatively refractory to PGE₂‐mediated down‐regulation. Instead, they were suppressed by a contact‐dependent T cell‐Mφ interaction. Furthermore, tumor‐derived factors such as granulocyte‐Mφ colony‐stimulating factor (GM‐CSF) seem to play an important role in the induction and expansion of the Mac‐1⁺2⁺ Mφ. These cells appear to mediate down‐regulation of the host immune responses by at least two distinct mechanisms: 1) PGE₂ production and 2) a cell contact‐dependent, but non‐major‐histocompatibility‐complex‐specific, interaction.