The biosynthesis of cachectin/TNF is largely regulated at a post-transcriptional level. Bacterial endotoxin, which strongly induces cachectin/TNF production, thus seems to elicit at least some of its effects by altering the macrophage cytoplasmic milieu. It has previously been shown that the 3'-untranslated TTATTTAT element present in numerous cytokines and proto-oncogenes is capable of repressing the translation of mRNA molecules in which it is represented. Using constructs in which the CAT coding sequence is followed by varying segments of the cachectin/TNF 3'-untranslated region, we now demonstrate that downstream sequences present in the cachectin/TNF mRNA are sufficient to mediate greater than 200-fold induction of CAT synthesis in response to activation by endotoxin. Induction of CAT activity is not attributable to a change in cytoplasmic mRNA concentration, but to a marked enhancement of translational efficiency. The response to endotoxin represents "derepression," and is conferred chiefly by the translationally repressive TTATTTAT element, acting in concert with essential flanking sequences.