We show that the cytotoxins tumor necrosis factor (TNF) or lymphotoxin (LT), at concentrations of approximately 10(-11) M induce monocytic differentiation of human myeloid cell lines. After 5 d of culture in the presence of rTNF and LT, a significant proportion of the myeloid cell lines express monocyte differentiation antigens and ANAE activity, and become able to reduce nitroblue tetrazolium (NBT) and mediate low levels of ADCC against tumor target cells. These markers of differentiation, however, are maximally induced when rIFN-gamma, at concentrations as low as 4 U/ml, is present simultaneously with the cytotoxins, and the two classes of cytokines act synergistically to induce terminal differentiation. The appearance of monocytic antigens is accompanied by acquisition of morphology and other functional properties of mature monocytic cells, such as chemiluminescence and phagocytosis, and by expression of FcR for monomeric IgG. A decrease in cell proliferation accompanies induced differentiation, and is not due to the cytotoxic properties of TNF or LT, as indicated in simultaneous analysis of surface phenotype and cell cycle. The lack of cytotoxicity of TNF on the HL-60 cell line is also demonstrated by the enhancing effect of TNF on HL-60 cell growth and nucleoside uptake in the first 2 d of culture. These data show that the cytotoxins TNF and LT mediate complex effects on cells of the myelomonocytic lineage and, in synergy with IFN-gamma, can fully induce immature myeloid cells to differentiate into cells with phenotypic, functional, and proliferative characteristics of terminally differentiated myelomonocytic cells.