Friend virus-transformed mouse erythroleukemia (MEL) cells can be induced to undergo erythroid differentiation by a variety of compounds, including dimethyl sulfoxide (DMSO) and the adenosine analog xylosyladenine. The present studies have monitored the effects of the stable adenosine receptor ligand N6-phenylisopropyladenosine (PIA) on induction of MEL cell differentiation. PIA has been previously shown to stimulate adenylate cyclase activity in rat hepatic and mouse Leydig 1-10 cells as well as inhibit adenylate cyclase in adipocytes. In the present study, PIA was ineffective as an inducer of the differentiated MEL cell phenotype. However, the results demonstrate that PIA inhibits the induction of MEL cell differentiation by DMSO and xylosyladenine. The extent of this inhibition as determined by benzidine staining, induction of globin RNA, and loss of self-renewal capacity was dependent on PIA concentration. The results also demonstrate that PIA induces a rapid and sustained increase in cyclic AMP (cAMP) levels. Furthermore, there was a highly significant correlation between cAMP levels and inhibition of xylosyladenine-induced differentiation (r = 0.962, P less than 0.0005). This relationship is further supported by the demonstration that prostaglandins E1 and E2 increase MEL cell cAMP levels and inhibit induction of the differentiated MEL cell phenotype. Moreover, PIA inhibited induction of MEL cell differentiation by butyric acid, diazepam, hypoxanthine, and the aminonucleoside analog of puromycin. These results suggest that cAMP may act as a negative regulatory signal in the induction of MEL cell differentiation.