Tumor necrosis factor (TNF) is a regulatory cytokine that has pleiotropic effects on hematopoietic cell growth and differentiation. The present studies have examined the effects of TNF on the differentiation of phorbol-ester resistant human KG-la leukemia cells. Treatment with 100 U/mL of TNF or 33 nM 12-O-tetradecanoylphorbol-13-acetate (TPA) had no detectable effect on the growth of KG-1a cells. In contrast, TNF, but not TPA, induced cellular aggregation and expression of the ICAM-1 adhesion molecule in KG-1a cells. Furthermore, KG-1a cells responded to TNF, but not to TPA, with a partial down-regulation of c-myc mRNA levels and induction of M-CSF gene transcription. Previous work suggested that TNF induces M-CSF gene expression through activation of phospholipase A2 and eicosanoid production. The present studies also demonstrate that TNF stimulated phospholipase A2 activity. In contrast, there was no detectable increase in phospholipase A2 activity following TPA treatment. These results indicate that: 1) certain characteristics of the differentiated monocytic phenotype were induced by TNF in the phorbol ester-resistant KG-1a line, and 2) treatment with TNF and not TPA was associated with activation of phospholipase A2 during induction of monocytic differentiation in these cells.