In order to elucidate the function of the c-fgr protein tyrosine kinase, we have investigated the expression of c-fgr in the human promyelocytic cell line, HL60, during myeloid differentiation induced by dimethylsulfoxide (DMSO). The expression of c-fgr was preceded by growth arrest of DMSO-treated cells, as determined by [3H]-thymidine incorporation and colony-forming ability, and it became detectable when cells committed for terminal differentiation. The maximum expression was detected in the terminal stage of differentiation. The profile of tyrosine phosphorylation in cellular proteins was distinct among cells at various stages of the differentiation program. The 116 kd tyrosine-phosphorylated protein detected in exponentially proliferating HL60 cells diminished during the course of the growth arrest and a distinct profile of tyrosine phosphorylation (including 177 and 165 kd proteins) appeared in cells undergoing terminal granulocytic differentiation. These findings implicate the involvement of p55c-fgr in the process of terminal granulocytic differentiation. However, the tyrosine kinase activity of p55c-fgr expressed in differentiating HL60 cells was markedly inhibited by the tyrosine phosphatase inhibitor, sodium orthovanadate, suggesting the presence of a mechanism involving tyrosine phosphorylation that negatively regulates the kinase activity of p55c-fgr.