Conditioned medium containing a differentiation-stimulating factor (D-factor) for M1 cells (myeloid leukemia cell line) was recovered over a period of several weeks by culturing mouse secondary embryo cells in serum-free medium but supplemented with bovine serum albumin. Incubation of M1 cells with the conditioned medium for 48 hr or less resulted in differentiation of 60 to 80% of the cells. From the conditioned medium, D-factor was partially purified by preparative electrophoresis on a Pevikon block and the specific activity was increased 50 approximately 60-fold. The partially purified D-factor was capable of differentiating 30% of the M1 cells at a protein concentration of 2 approximately 3 microgram/ml. Half-logarithmic plots of phagocytosis-inducing activity vs. protein concentration yielded a sigmoid dose-response curve. D-factor is considered to be a glycoprotein with a molecular weight of 40,000 approximately 50,000 and an electrophoretic mobility of alpha-globulin. It is resistant to different protein-denaturing treatments. Since the nature of D-factor differs from that of the colony-stimulating factor for mouse bone marrow cells, it appears that these two activities are due to different substances.