Mitogen-stimulated lymphocytes and some T-lymphocyte lines released a polypeptide called differentiation-inducing factor (DIF), which restored maturation of promyelocytic HL-60 cells and inhibited growth of leukemic and normal progenitor cells. Tumor Necrosis Factor (TNF), which has been found to be not identical with DIF, displayed similar effects. On the other hand, an antigenic relationship was shown between DIF and lymphotoxin (LT) by use of neutralizing antibodies. An activity, which cochromatographed with DIF during all purification steps, competed with binding of both rLT and rTNF to HL-60 cells. Approximately 2,000 binding sites for rLT were detected per cell, with a Kd of 330 pmol/l. Our observations are indications of a functional and an antigenic connection between DIF and LT, and indicate that TNF, LT and DIF share cell surface-binding sites. These binding sites are down regulated by activation of protein kinase-C. Results from modulation of the response indicated that the signal for differentiation might be transduced through activation of phospholipase A2. In order to understand myeloid differentiation and the effects of differentiation factors, we have pursued investigations of the biosynthesis and processing of one marker of myeloid differentiation, namely myeloperoxidase (MPO). Our results disclosed that MPO was synthesized as a larger precursor of Mr 90,000 to which a heme group was added, followed by proteolytic cleavage in pregranular structures to generate mature heavy Mr 60,000 and light Mr 12,000 subunits. Processing of MPO was independent of acidification. cDNA probes are now available for MPO, so that investigation of gene expression in relation to differentiation and induction of differentiation is facilitated.