We previously demonstrated that thyroid capsular inflammation induced by continuous treatment with the antithyroidal agent sulfadimethoxine is associated with development of invasive follicular cell carcinomas in rats initiated with N-bis(2-hydroxypropyl)nitrosamine (DHPN). The inflammatory changes are characterized by large numbers of macrophages and lymphocytes as well as fibroblasts and we hypothesized that it might be enhanced by interplay between macrophages and T cells. To clarify this hypothesis, a comparative study was conducted between athymic nude (rnu/rnu) rats and euthymic (rnu/+) littermates initiated with DHPN (2800 mg/kg, s.c.) followed by sulfadimethoxine treatment in drinking water (0.1%) for 10 weeks. In rnu/+rats, marked capsular thickening with inflammation was induced along with invasive follicular cell carcinomas (2.8 ± 1.3/rat). In rnu/rnu rats, limited fibrous capsular thickening was noted with or without minimal inflammatory change, and the multiplicity of invasive carcinomas was significantly lower (1.1 ± 1.0/rat, P < 0.01). Inducible nitric oxide synthase expression in the inflamed lesions was detected in three of 10 rnu/+rats but in none of the rnu/rnu animals. The results thus suggest that development of invasive carcinomas is enhanced by capsular inflammation mediated by T cells, and inducible nitric oxide synthase induction may play a role in tumor progression.