Tumor necrosis factor (TNF) is a highly potent pleiotropic response modifier in inflammatory and immunologic host defense reactions. It can also be toxic to cells and elicit toxic systemic reactions, as evinced by certain pathophysiologic conditions that are initiated or aggravated by an excess of TNF. The cellular mechanisms for transducing TNF signals are complex. There are two forms of TNF, alpha and beta, and two distinct TNF receptors. Many cells express both receptor types simultaneously, even though neither membrane receptor can distinguish between TNF-alpha and TNF-beta. The effects of TNF are inhibited by binding proteins that are truncated fragments of the extracellular domains of the TNF receptors. The mechanisms by which these components of the TNF signal transmission pathways interact to mediate the pleiotropic effects of TNF remain unclear.