Covalent coupling of Adriamycin (ADR) to polyglutaraldehyde microspheres focuses the drug action to the plasma membrane which leads to growth inhibition and also to induction of erythroid differentiation in human leukemic K-562 cells without any evidence of cellular internalization of the drug-microsphere complexes. As observed with the free drug, a reduction in cell growth by the coupled drug correlated with a recruitment of differentiating cells. Treatment of sensitive cells with ADR-microspheres results in 40% of cells containing hemoglobins as determined by benzidine staining at 87% growth inhibition. Similar treatment of ADR-resistant cells produces 24% of benzidine-positive cells at 72% growth inhibition. Furthermore, free and coupled forms of ADR stimulate heme synthesis 12- and 20-fold. Hemoglobin analysis of ADR-polymer induced cells demonstrates additional embryonic (Gower-2, X, Portland) and fetal (F) types of hemoglobin in comparison to uninduced cells which synthesize only small amounts of Gower-1 in sensitive cells and Gower-1 plus hemoglobin X in resistant cells. In addition, free and bound forms of Adriamycin differ markedly in the relative proportion of hemoglobin types that they induce. Free and coupled forms of ADR produce an increase in the gamma-globin mRNA synthesis in sensitive K-562 cells. These results demonstrate that both ADR-sensitive and -resistant K-562 cells can be induced to differentiate at the cell surface by ADR-microspheres and that this induction differs qualitatively from that of free ADR.