The experiments were designed to test whether or not erythroblast progenitor cell function could be demonstrated in a morphological cell type designated as "transitional cells." Two cell fractions, were obtained from the bone marrow of normal and polycythemic guinea pigs. One fraction (F1) was enriched in transitional cells and contained few, if any, other cell types which could be considered as candidates for erythropoietin responsive cells (ERC). The other fraction (F2) contained undifferentiated blast cells as well as transitional cells. The effect of human urinary erythropoiesis stimulating factors (ESF) on heme synthesis was compared in these two fractions by measuring 59Fe incorporation into heme. ESF was more effective in stimulating heme synthesis in guinea pig bone marrow cells than homologous sera obtained from anemic or hypoxic animals. The majority of ERC sedimented in F2, but the stimulation index was comparable in the two fractions. It was confirmed by radioautography that the ESF response in F1 was due to the generation of proerythroblasts and basophilic erythroblasts that incorporated 55Fe. The generation of these cells in F1 was dependent on the addition of ESF to the cultures, whereas 55Fe-labeled erythroblasts were recovered from cultured of F2 not supplemented with ESF. ESF induced a proportion of transitional cells to incorporate 55Fe in both F1 and F2. Transitional cells were the only cell type in which heme synthesis was dependent on ESF. in other cells of clearly nonerythroid morphology (mononuclear phagocytes and reticular cells), 55Fe incorporation occurred independent of ESF. Although the fractionation procedure employed is unsuitable for the separation of ERC from bone marrow, it permitted the enrichment of transitional cells, a cell type defined by morphology. Radioautography with 55Fe identified a proportion of these cells as ERC in both F1 and F2 fractions of bone marrow obtained from normal and polycythemic guinea pigs. Although there may be other cell types in F2 capable of responding to ESF, the present studies show that some transitional cells function as progenitors of erythroblasts because they respond to ESF by initiation of heme synthesis and by transformation into the earliest recognizable erythroid cells.