A cell line, HAFTL-1, derived by in vitro transformation of fetal liver cells with v-Ha-ras, was found to have molecular and phenotypic characteristics of pro-B cells recently committed to the Ly-1+ B cell differentiation pathway. Stimulation of these cells with LPS resulted in their differentiation within either the B or myelomonocytic lineages. Thus, lines derived from LPS-stimulated HAFTL-1 cells were shown to be clonally related, as evidenced by common v-ras integrations, but to exhibit characteristics of pre-B cells (ThB expression, continuing DJ heavy chain rearrangements) or mature macrophages (expression of Mac-1 and Mac-2, lysozyme and nonspecific esterase production, phagocytosis) while maintaining their Ly-1+ phenotype. These results suggest that events resulting in the irrevocable commitment to a single lineage occur late in differentiation, at least within the pathway yielding Ly-1+ B cells and a proposed subpopulation of Ly-1+ monocytes and macrophages. Final commitment to these lineages is carefully orchestrated, as evidenced by restricted expression of Ly-5 isoforms and production of IgH transcripts.