We investigated the effects of interleukin (IL)-10 administration on allergen-induced Th2 cytokine production, eosinophilic inflammation, and airway reactivity. Mice were sensitized by intraperitoneal injection of ragweed (RW) adsorbed to Alum and challenged by intratracheal instillation of the allergen. Sensitization and challenge with RW increased concentrations of IL-10 in bronchoalveolar lavage (BAL) fluid from undetectable levels to 60 pg/ml over 72 h. Intratracheal instillation of 25 ng of recombinant murine IL-10 at the time of RW challenge further elevated BAL fluid IL-10 concentration to 440 pg/ml but decreased BAL fluid IL-4, IL-5, and interferon-γ levels by 40–85% and eosinophil numbers by 70% (P < 0.0001). Unexpectedly, the same IL-10 treatment increased airway reactivity to methacholine in spontaneously breathing mice that had been sensitized and challenged with RW (P < 0.001). IL-10 treatment in naive animals or RW-sensitized mice challenged with PBS failed to increase airway reactivity, demonstrating that IL-10 induces an increase in airway reactivity only when it is administered in conjunction with allergic sensitization and challenge. The results demonstrate that IL-10 reduces Th2 cytokine levels and eosinophilic inflammation but augments airway hyperreactivity. Thus, despite its potent anti-inflammatory activity, IL-10 could contribute to the decline in pulmonary function observed in asthma.