There is considerable evidence that malignant transformation need not eliminate the potential for a cell to express its developmental capabilities. This review explores the process whereby polar compounds, hexamethylene bisacetamide (HMBA) in particular, induce murine erythroid leukemoid cells (MELC) to express the differentiated erythroid phenotype, including hemoglobin production and cessation of cell division. This is a multi-step process which, although the mechanisms of action of HMBA are not yet fully understood, is amenable to experimental definition and analysis. Early effects, including changes in protein kinase C activity, in ion transport, and in expression of certain nuclear proto-oncogenes, have been examined in relation to the onset of terminal cell differentiation. This experimental experience has formed the context for initiating preliminary clinical studies designed to examine the pharmacology of HMBA and to explore its potential for modifying the natural history of cancer.