We previously demonstrated that the retroviral construct MHE226 transducing both the P135gag-myb-ets and p61/63myc nuclear proteins induces solid hemopoietic tumors in early chicken embryos. In the present paper, we report the characterization of two MHE226-transformed cell lines established from such hemopoietic tumors retrieved from the heart of a 13-day embryo. Cytological analysis indicated a myeloblastic phenotype. These MHE226 cell lines were positive for the MEP17 monoclonal antibody but were negative for the myeloblast-specific 51/2 monoclonal antibody. MHE226 cell lines displayed a doubling time of about 20-24 h and were maintained for at least 1 year. Contrary to E26 myeloblastic cell lines, MHE226 cell lines were independent of chicken myelomonocytic growth factor and could be maintained in serum-free medium. MHE226 cell lines could be induced to differentiate toward the monocytic lineage by retinoic acid. Retinoic acid inhibited proliferation of MHE226 cell lines as early as day 1. After 3 days, MHE226 cells displayed cytological, enzymatic (alpha-naphthyl acetate esterase and chloroacetate esterase), and functional (phagocytosis) characteristics of monocytic cells. The retinoic acid-induced differentiation of MHE226 cells could not be inhibited by v-erbA. Thus, MHE226-transformed cell lines represent a novel model of cell transformation by two nuclear oncoproteins. Furthermore, they provide a model to study molecular mechanisms implicated in the monocytic differentiation program.