There is compelling evidence to suggest that inflammation significantly contributes to neurodegenerative changes. Consistent with this is the observation that several neurodegenerative disorders are accompanied by an increase in the concentration of interleukin (IL)-1beta. IL-1beta has a negative impact on synaptic plasticity and therefore an increased concentration of IL-1beta, such as that in the hippocampus of the aged rat, is associated with a deficit in long-term potentiation (LTP). IL-1beta is derived mainly from activated microglia but the trigger leading to this activation, specifically in the aged brain, remains to be identified. Here we examined the possibility that interferon (IFN)gamma may stimulate microglial activation and increase IL-1beta concentration, thereby inhibiting LTP. The IFNgamma concentration was increased in hippocampus prepared from aged, compared with young, rats and inversely correlated with the ability of rats to sustain LTP. Intracerebroventricular injection of IFNgamma inhibited LTP, and increased microglial activation was observed in both IFNgamma-injected and aged rats. The age-related increase in IFNgamma was accompanied by a decrease in the hippocampal concentration of insulin-like growth factor (IGF)-1. The evidence presented suggests that IGF-1 acts to antagonize the IFNgamma-induced microglial activation, the accompanying increase in IL-1beta concentration and the consequent deficit in LTP.