The mechanism by which tumour necrosis factors (TNF and lymphotoxin, also called TNF alpha and TNF beta respectively) exert their cytotoxic activity on many malignant cells, remains largely unknown. Furthermore, the broad array of differentiation (gene induction) and mitogenic activities towards many primary cells is still a subject of intensive investigation. TNF is an important mediator in inflammation, immune responses and infection-related phenomena and these activities contribute to the severe toxicity seen when TNF is used as an anticancer agent. The first step in the mechanism of action is the specific binding of the ligand to its receptors and dissection of the molecular mechanism involved in this interaction is the subject of this review. The reasons for the interest in this aspect are obvious: first, the development of strong antagonistic TNF analogues can be useful in dampening the potentially lethal or debilitating effects of an overproduction of the cytokine (as in septic shock or rheumatoid arthritis). Secondly, since two distinct TNF receptors exist, construction of TNF muteins that distinguish between both types may lead to derivatives of this pleiotropic agent with a more restricted biological activity pattern. Ideally, one would like to develop a TNF mutant that has retained its cytotoxic action on tumour cells without inducing the deleterious systemic toxicity. Such an optimized TNF molecule could become a potent anticancer agent.