Normal human bone marrow cells, highly enriched for burst-forming units-erythroid (BFU-E), were cultured in serum-free medium, in the presence and absence of various factors, to investigate the mechanisms involved in regulating erythroid differentiation. In cultures containing interleukin 3 (IL-3), Steel factor (SF), and erythropoietin (Ep), benzidine-positive erythroblasts first became detectable on day 6. Their numbers then rapidly increased until, by day 16, > 99% of the cells, which were 20,000-fold amplified over input numbers, were benzidine-positive. It is interesting to note that omission of either SF or Ep from this assay markedly enhanced the rate of differentiation and reduced total cell numbers, whereas omission of IL-3 had no effect on the rate of differentiation and only slightly reduced cell numbers. Of various agents tested, the most potent erythroid differentiation inducer (and inhibitor of cell proliferation) was found to be transforming growth factor beta 1 (TGF-beta 1). This cytokine stimulated both the rapid appearance of hemoglobin-positive cells and an early cessation of cell proliferation. Using fluorescently tagged antibodies to glycophorin A and fluorescence-activated cell sorter (FACS) analysis, this phenomenon was shown to be due to an early induction of erythroid differentiation rather than an aberrant production of hemoglobin. Methylcellulose assays indicated that the well-documented reduction of BFU-E colony numbers observed with TGF-beta 1 may actually be due to a TGF-beta 1-induced "conversion" of BFU-E into colony-forming units-erythroid (CFU-E). Thus, in vivo, TGF-beta 1 might serve, in part, to decrease the number of mature erythrocytes by stimulating BFU-E to skip a number of cell divisions and differentiate early.