Rhodococcus equi', a facultative intracellular pathogen of macrophages, is an important cause of pneumonia in foals and immunocompromised people. Isolates of 'R. equi' from pneumonic foals typically contain a large 85-90 kb plasmid encoding a highly immunogenic virulence-associated protein (VapA). Clinical isolates of 'R. equi' containing the 85-kb plasmid and expressing VapA replicated within mouse macrophages in vitro, while plasmid-cured derivatives of these organisms did not. All foals experimentally infected with a plasmid-containing clinical isolate developed severe bronchopneumonia; whereas, foals infected with the plasmid-cured derivative remained free of visible lung lesions and rapidly cleared the organism. A recombinant, plasmid-cured derivative expressing wild-type amounts of VapA failed to replicate in macrophages and remained avirulent, showing that expression of VapA alone is not sufficient to restore the virulence phenotype. Interleukin (IL)-1 b , IL-6, IL-10, IL-12 p40 and tumor necrosis factor (TNF)- a -production by mouse macrophages infected in vitro with a virulent strain of 'R. equi' did not differ significantly from that of macrophages infected with the avirulent plasmid-cured derivative. To evaluate whether plasmid-encoded products mediate virulence by modulating the cytokine response of foals, a quantitative reverse transcription-competitive polymerase chain reaction assay was developed. Foals infected with a virulent strain of 'R. equi' had similar interferon (IFN)- g and IL-12 p35 but significantly higher IL-1 b , IL-10, IL-12 p40 and TNF- a mRNA expression in lung tissue when compared to foals infected with the plasmid-cured derivative. Interferon- g mRNA expression in CD4+ T lymphocytes isolated from bronchial lymph nodes (BLN) was similar for both groups of 'R. equi '-infected foals on day 3 postinfection. However, on day 14, in association with pneumonia and marked multiplication of virulent 'R. equi' but with complete clearance of the plasmid-cured derivative, IFN- g mRNA expression in BLN CD4+ T lymphocytes was significantly higher in foals infected with the plasmid-cured derivative. These results indicate that the 85-kb plasmid of 'R. equi' is essential for intracellular replication within macrophages and for development of disease in the native host, the foal, and suggest an immunomodulating role for ' R. equi' virulence plasmid-encoded products in downregulating IFN- g mRNA expression by CD4+ T lymphocytes.