Growth in the presence of retinoids was found to induce erythroid differentiation in Friend murine erythroleukemia (MEL) cells in culture. The program of differentiated functions expressed by retinoid-treated cells was quite similar to that promoted by other inducers of MEL cell differentiation. For example, 70% or more of induced cells synthesized hemoglobin which accumulated to a level of 8 micrograms-10 micrograms per 10(6) cells. The level of acetylcholinesterase activity increased two to five-fold in induced cells, and induction by retinoids, like induction by dimethylsulfoxide (DMSO), promoted the appearance of cell surface lumps or 'blebs'. All-trans retinaldehyde, which promoted maximum hemoglobin and acetylcholinesterase synthesis at a concentration of 5 X 10(-7) M, was found to be a more potent inducer than all-trans retinoic acid or retinol, which both showed maximum induction at 1 X 10(-5) M. Like differentiation promoted by DMSO, retinoid-induced differentiation was inhibited by 10(-7) M dexamethasone.