The release of amphoterin by murine erythroleukaemia cells exposed to the chemical inducer hexamethylenebisacetamide represents an essential step for the process of their terminal differentiation. Once exported in the culture medium, amphoterin undergoes limited proteolysis, catalysed by a serine proteinase also secreted by stimulated cells. The isolated proteinase is responsible for degradation of amphoterin, with the production of a 10-amino-acid-residue fragment, specifically retaining the cell-differentiation-stimulating activity of the native protein molecule. This peptide does not express other properties of amphoterin, such as protein kinase C-stimulating activity or systemic toxicity. These findings define a selective mechanism accounting for extracellular amphoterin functional maturation.