Normal and malignant CD5+ B lymphocytes can develop macrophage-like characteristics. One stimulus of this phenotypic shift is culture of normal mouse splenic B lymphocytes with splenic fibroblasts or their conditioned media. These biphenotypic B/macrophage (B/M phi) cells simultaneously display macrophage characteristics, such as phagocytosis and F4/80 expression, while retaining B cell features, including expression of surface Ig, CD5, B220, and rearranged Ig genes. The present study investigated the fibroblast-secreted factor that promotes this phenotypic change from B cell to B/M phi cell. RT-PCR analysis demonstrated that mRNA for M-CSF is produced by splenic fibroblasts. Recombinant M-CSF (CSF-1) could replace fibroblast-conditioned medium to elicit the development and survival of B/M phi cells from splenic B lymphocytes. In addition, neutralization of fibroblast-secreted M-CSF with specific mAbs abrogated the ability of conditioned supernatants to promote outgrowth of B/M phi cells. The transition from B lymphocyte to B/M phi cell was marked by the kinetic appearance of mRNA for the M-CSF receptor, c-fms, at day 3 following culture initiation. These results demonstrate that M-CSF is important in the development and physiology of mouse B/M phi cells and potentially in the growth of human biphenotypic hematological malignancies. Interestingly, the presence of IFN-gamma in splenic B lymphocyte cultures abrogated the effect of fibroblast-conditioned medium or M-CSF on outgrowth of B/M phi cells. Furthermore, these findings suggest that a Th1 microenvironment favored by typical macrophages is detrimental to the outgrowth of B/M phi cells.