Immune induction is effected through the interaction of antigen-presenting cells with specific receptors on the surface of thymus-derived lymphocytes, Cells most able to ingest, process, and present antigen appear to be related to the mononuclear phagocyte/neutrophil series. For example dendritic cells (DC) can be found in colonies of GM-CSF-responsive bone marrow cells, and under experimental conditions are routinely expanded as a population in vitro from GM-CSF-responsive progenitor cells. To address the question of DC lineage and to determine what genes are involved in lineage commitment, we have generated a series of GM-CSF-responsive cell lines that can be induced to differentiate in a homogeneous manner in vitro, The cloned cell lines are derived from 12-day fetal liver and are transformed with a truncated form of c-myb, which lacks the normal autoregulatory sequences. As far as we know, these myb-transformed hemopoietic cells (MTHC) differ from normal only in the unregulated expression of myb, a gene whose expression is obligatory for proliferation of hemopoietic cells. MTHC in the presence of TNF-alpha and IL-4 will differentiate into cells that have many of the properties of macrophages, When the same MTHC lines are exposed to TNF-alpha in combination with IFN-gamma, the cells instead become DC. The differentiated DC are potent presenters of antigen in mixed lymphocyte reactions and of soluble antigen to specific T cell lines. Thus, cells with the properties of both macrophages and DC can be derived from a single type of GM-CSF-responsive progenitor cell. We have used this MTHC system to analyze differences in gene expression as the cells mature along the DC and macrophage pathways, A distinctive pattern of differentially expressed cDNAs is evident where macrophage-specific cDNAs are homologous to genes encoding cytoskeletal and cell-surface proteins, whereas the DC-specific cDNAs are homologous to signaling, chemokine, and IFN-gamma-inducible genes. We discuss the utility of MTHC in analyzing the relationships between DC and macrophages, and suggest that DC and macrophages represent extreme phenotypes in a spectrum of antigen handling cells that are somewhat interchangeable, depending on their immediate environment.