The combination of chemotherapy with immunotherapy may offer an advantage over either therapy alone and provide a greater potential for total tumor eradication. Monocyte/macrophage-mediated tumor cell killing is a major mechanism of the host's defense against primary and/or metastatic neoplasia. We evaluated the tumoricidal activity against canine osteosarcoma cells of canine pulmonary alveolar macrophages (PAM) exposed in vitro to two recombinant canine (rc) cytokines (rcTNF alpha and rcIFN gamma). We also evaluated the in vivo tumoricidal activity of PAM from dogs treated with the macrophage activator, liposome-encapsulated muramyl tripeptide-phosphatidyl-ethanolamine (L-MTP-PE) alone or in combination with doxorubicin (DOX). This study demonstrated that rcTNF alpha and rcIFN gamma significantly enhance in vitro canine PAM cytotoxicity against canine osteosarcoma cells, and that PAM from dogs treated with DOX + L-MTP-PE have enhanced cytotoxic activity against osteosarcoma cells when compared to dogs treated with DOX or L-MTP-PE alone. These findings support the rationale for combining a chemotherapy agent with an immunotherapy agent for the treatment of metastatic disease, and suggest a role for TNF alpha and IFN gamma as agents for stimulating the antitumor activity of macrophages.