AFP is one of several oncofetal proteins synthesized in large amounts by the fetus. Although synthesis drops markedly shortly after birth, small amounts of AFP continue to be produced in the adult. The function of AFP is unknown, but recent studies suggest the possibility that it may have immunoregulatory properties and/or may influence cell proliferation and growth. The high affinity of AFP for estrogen could have important biological functions, although the significance of this binding has not yet been clearly defined. Elevated levels of AFP are seen in a variety of clinical situations, including pregnancy; hepatic disorders, especially chronic hepatitis; and various malignancies, particularly hepatomas, teratomas, and those of primitive gut origin. It is also produced in murine GVH reactions and in lymphomas, both in mice and humans. In human and murine lymphomas, and murine GVH reactions, the presence of AFP-positive cells and immune suppression are highly correlated, but the role of these in the pathogenesis of the diseases is as yet unclear. It appears, however, that AFP may be produced locally in lymphoid tissues involved in GVH and lymphomatous disease without elevations in serum AFP levels. It is speculated that the local production of AFP in these situations may result from blastogenesis of lymphoid cells directed against foreign tumor or viral antigens. AFP could promote the development of tumors either by suppressing immune surveillance and/or immunity to oncogenic viruses, although this is speculative. Finally, the AFP elevations in maternal serum and amniotic fluid are valuable diagnostically in the detection of fetal abnormalities, particularly neural-tube defects.