The transformation of human agranular blood lymphocytes into large granular lymphocytes (LGL) was studied. On the average, 2.8% of peripheral blood lymphocytes differentiate in less than 24 hr into LGL when cultured with autologous plastic-adherent monocytes and the Burkitt's lymphoma cell line Raji. The LGL precursors were intermediate-density lymphoid cells that were heterogenous for T3, T8, and Leu-7 antigens, negative for T4 and Leu-11, and positive for NK-9. During the transformation, frequency of Leu-11-positive cells increased and the cytotoxic activity was augmented. In single cell cytotoxicity experiments, the number of binding cells increased, whereas the number of killer cells among the binding cells remained unaltered. The transformation inducing factor was detectable in coculture supernatants of Raji and monocytes or Raji and the myeloid cell line ML-2. Analyses of the Raji-ML-2 coculture supernatants with reverse phase and gel filtration high-pressure liquid chromatography indicated that the factor is a heat- and trypsin-sensitive hydrophilic molecule with an apparent m.w. of 1000.