We investigated the ability of purified, recombinant DNA-derived interferons (IFN) to induce phenotypic changes in cells of the HL-60 promyelocytic leukemia cell line. Changes in cell surface markers detected by monoclonal antibodies as well as morphologic, histochemical, and functional changes were monitored. We found that gamma-IFN, but not alpha- or beta-IFN, induced the expression of antigens characteristic of monocytes and granulocytes (AML-2-23, 63D3, and 61D3), as well as changes in morphology consistent with monocytoid differentiation. These included induction of alpha-naphthyl acetate esterase, increased cell size, and a decrease in azurophilic granules. The gamma-IFN dose dependency and time course of the effect on antigen expression suggest that de novo protein synthesis was induced by gamma-IFN. The activity of gamma-IFN and of mixed-lymphocyte culture supernatant was blocked by a monoclonal antibody to gamma-IFN. Significant augmentation in the ability of the HL-60 cells to mediate antibody-dependent cellular cytotoxicity was induced by gamma-IFN. These findings suggest that gamma-IFN plays a role in the regulation of hematopoiesis.