Inorganic arsenite has caused severe inflammatory chronic poisoning in humans through the consumption of contaminated well water. In this study, we examined the effects of arsenite at nanomolar concentrations on the in vitro differentiation of human macrophages from peripheral blood monocytes. While arsenite was found to induce cell death in a culture system containing macrophage colony stimulating factor (M-CSF), macrophages induced by granulocyte-macrophage CSF (GM-CSF) survived the treatment, but were morphologically, phenotypically, and functionally altered. In particular, arsenite-induced cells expressed higher levels of a major histocompatibility complex (MHC) class II antigen, HLA-DR, and CD14. They were more effective at inducing allogeneic or autologous T cell responses and responded more strongly to bacterial lipopolysaccharide (LPS) by inflammatory cytokine release as compared to cells induced by GM-CSF alone. On the other hand, arsenite-induced cells expressed lower levels of CD11b and CD54 and phagocytosed latex beads or zymosan particles less efficiently. We also demonstrated that the optimum amount of cellular reactive oxygen species (ROS) induced by nM arsenite might play an important role in this abnormal monocyte differentiation. This work may have implications in chronic arsenic poisoning because the total peripheral blood arsenic concentrations of these patients are at nM levels.