Mouse myeloid leukemia cells (Ml) were induced to differentiate into mature macrophages and granulocytes by various inducers. The differentiated Ml cells synthesized and released prosetaglandins, whereas untreated Ml cells did not. When the cells wee prelabelled with [14C]arachidonate, the major prostaglandins released into the culture media were found to be prostaglandin E2, D2, and F2 alpha in an early stage of differentiation, but the mature cells produced predominantly prostaglandin E2. The synthesis and release of prostaglandins were completely inhibited by indomethacin. Dexamethasone, a potent inducer of differentiation of Ml cells, did not induce production of prostaglandins in resistant Ml cells that could not differentiate even with a high concentration of dexamethasone. These results suggest that production of prostaglandins in Ml cells is closely associated with differentiation of the cells. Homogenates of dexamethasone-treated Ml cells converted arachidonate to prostaglandins, but this conversion was scarcely observed with homogenates of untreated Ml cells. Dexamethasone and the other inducers stimulated the release of arachidonate from phospholipids. Therefore, induction of prostaglandin synthesis during differentiation of Ml cells may result from induction of prostaglandin synthetase activity and stimulation of the release of arachidonate from cellular lipids. Lysozyme activity, which is a typical biochemical marker of macrophages, was induced in Ml cells by prostaglandin E2 or D2 alone, as well as by inducers of differentiation of the cells, but it was not induced by arachidonate or prostaglandin F2 alpha. These results suggest that prostaglandin synthesis is important in differentiation of myeloid leukemia cells.