Expression of granulocyte macrophage colony-stimulating factor (GM-CSF) in the airway allows allergic sensitization to ovalbumin (OVA) in an experimental protocol that others have shown to induce inhalation tolerance. The ensuing response is characterized by T helper (Th)2 cytokines, marked eosinophilia in the bronchoalveolar lavage fluid (BALF) and the tissue, and goblet-cell hyperplasia. These findings, which underscore the importance of the airway microenvironment in the development of immune responses to airborne antigens, prompted us to investigate whether a Type 1 polarized cytokine milieu in the airway would modulate the allergic sensitization. To this end, we concurrently expressed GM-CSF and interleukin (IL)-12 in the airway, using an adenovirus-mediated gene transfer approach. Coexpression of IL-12 did not prevent the development of an antigen-specific immune inflammatory response, but altered its phenotype. Whereas a similar total cell number was observed in the BALF, airway eosinophilia was abrogated. Histologic evaluation of the tissue corroborated the findings in the BALF and demonstrated that IL-12 coexpression prevented goblet-cell hyperplasia. Expression of IL-12 decreased IL-4 and IL-5 content in the BALF by about 80 and 95%, respectively, and IL-5 in the serum by approximately 80%. In contrast, interferon (IFN)-gamma was increased in both BALF and serum. Similarly, we observed a Th2/Th1 shift in OVA-specific cytokine production in vitro. Recall challenge with OVA in vivo after resolution of the initial inflammatory response demonstrated that the effect of IL-12 was persistent. IL-12-mediated inhibition of airway eosinophilia was mainly IFN-gamma-independent, whereas inhibition of OVA-specific IgE synthesis was IFN-gamma-dependent. Our data underscore the importance of the airway microenvironment in the elicitation of immune responses to environmental antigens.