We have previously reported that lithium chloride (LiCl) stimulates the production of granulocyte-macrophage colony-forming cells (GM-CFC), pluripotent stem cells (CFU-S), and differentiated granulocytes, macrophages and megakaryocytes in murine Dexter marrow cultures and that this effect appears to be mediated indirectly by a radioresistant adherent marrow cell. In this study we have established that exposure of murine Dexter cultures to LiCl (4 mEq/L) causes an increase of colony-forming cell megakaryocytes (CFU-meg) over 1 to 6 weeks of culture in both supernatant (188% to 611%) and stromal phases (123% to 246%). Moreover, we have shown that lithium treatment of either irradiated (1,100 rad) or unirradiated stromal cells increased production of activities stimulating formation of megakaryocyte, granulocyte, macrophage, and mixed lineage colonies and proliferation of the factor-dependent cell line, FDC-P1. This FDC-P1 stimulatory activity was completely blocked by an antibody to purified recombinant granulocyte-macrophage colony stimulating factor (rGM-CSF). The baseline or lithium-induced--stromal-derived bone marrow colony stimulating activity was partially blocked by the antibody to rGM-CSF and by an antibody to purified colony stimulating factor I (CSF-1); the two antibodies combined resulted in greater than 90% inhibition of the lithium-induced marrow stimulatory activity. In addition, radioimmunoassay (RIA) showed that although CSF-1 was detectable in supernatants of these cultures, exposure to lithium did not increase CSF-1 levels. These data indicate that Dexter stromal cells produce CSF-1 and GM-CSF and that lithium appears to exert its stimulatory effects on in vitro myelopoiesis by inducing production of GM-CSF.