Induction of experimental autoimmune diseases often relies on immunization with the organ-specific autoantigens in CFA, which contains heat-killed mycobacteria. In several of these models, including collagen-induced arthritis, endogenous IFN-gamma acts as a disease-limiting factor in the pathogenesis of the disease. Here we show that in collagen-induced arthritis the protective effect of IFN-gamma depends on the presence of mycobacteria in the adjuvant. Omission of mycobacteria inverts the role of endogenous IFN-gamma to a disease-promoting factor. Thus, the mycobacterial component of CFA opens a pathway by which endogenous IFN-gamma exerts a protective effect that supersedes its otherwise disease-promoting effect. Extramedullary hemopoiesis and expansion of the Mac-1+ cell population accompanied the accelerated and more severe disease course in the IFN-gamma receptor knockout mice immunized with CFA. Treatment of such mice with Abs against the myelopoietic cytokines IL-6 or IL-12 inhibited both disease development and the expansion of the Mac-1+ population. We postulate that mycobacteria in CFA stimulate the expansion of the Mac-1+ cell population by a hemopoietic process that is restrained by endogenous IFN-gamma. These results have important implications for the validity of animal models of autoimmunity to study the pathogenesis and to evaluate cytokine-based therapy of autoimmune diseases.