Recognition of the therapeutic value of glucocorticosteroids in the treatment of inflammation has preceded awareness of the mechanism(s) of action of these drugs. We recently showed that coculture of human T84 epithelial monolayers for 2 days with anti-CD3 activated peripheral blood mononuclear cells (A-PBM) led to impaired ion transport responses and reduced barrier function. We tested the hypothesis that budesonide, as a member of the new generation of more topically selective steroids, could prevent these immune-mediated epithelial abnormalities. Budesonide added to the coculture system dose-dependently inhibited the following functional T84 abnormalities measured in Ussing chambers: reduced transport responses (decreased short-circuit current changes to carbachol (raises [Ca2+]i) and forskolin (raises cAMP, cyclic adenosine monophosphate(i)); and increased permeability (decreased resistance and increased fluxes of 3H-mannitol and 51CrEDTA). For the beneficial effects of budesonide to be observed, PBM pretreatment (> or = 3 hr) and daily addition (for 2 days) to the coculture system was necessary. Budesonide (10(-7) M) dramatically reduced A-PBM proliferation (measured by 3H-thymidine incorporation) and cytokine (IL-1beta, IL-2, IL-6, IFN-gamma, TNF-alpha) production, but was not cytotoxic to immune cells. Budesonide treatment of T84 epithelial cells alone did not directly affect epithelial physiology, nor did it prevent epithelial abnormalities evoked by subsequent exposure to A-PBM or conditioned media from immune cells. Our studies showed that budesonide prevents epithelial dysfunction in this model by inhibiting activation of both T cells and monocytes.