The protein kinase inhibitor H7 [1-5(isoquinolinesulfonyl-2-methylpiperazine)] together with a temperature shift to 42 degrees C was found to reproducibly and efficiently induce differentiation of avian erythroblasts transformed with the avian erythroblastosis virus containing v-erbA and a temperature-sensitive v-erbB oncogene. Although a temperature shift to 42 degrees C without H7 results in some elevation of globin transcripts, much higher levels of transcripts accrue when cells are incubated at 42 degrees C with H7; under such conditions, 50-70% of the cells become benzidine positive. In order to investigate the mechanism by which the differentiation occurs, we have characterized and analyzed the levels of the erythroid transcription factor EF1, originally described as a factor binding to the beta H-globin promoter. Protein sequencing of EF1 shows that it is identical to the factor Eryf1. Using a peptide antibody and DNA-binding assays, we demonstrate that EF1 is present at high levels in the nucleus of undifferentiated HD3 cells, and, although there may be a small change when the cells are shifted to 42 degrees C, incubation of the cells with H7 at 42 degrees C does not result in a further elevation commensurate with the high levels of globin transcripts. It is concluded that v-erbA and v-erbB do not repress differentiation by limiting the levels of EF1.