When 5-fluorouracil (5-FU) resistant bone marrow (BM) cells are depleted of B-cells and then cultured in insert chambers [separated from a layer of adherent BM (aBM) cells by a nucleopore membrane], no mature, lipopolysaccharide (LPS) reactive B-cells are formed. Factors acting on B-cell precursors are not produced unless nonadherent accessory cells have been cultured with aBM cells in the surrounding well. Moreover, soluble products are insufficient to induce differentiation of B-cell precursors unless the cells have been conditioned by direct contact with aBM cells. Such preconditioned precursors complete differentiation when cultured with IL-3 plus IL-1 in dishes coated with fibronectin. In cultures supplemented with IL-3, IL-1 and fibronectin, a pleomorphic layer of aBM cells is generated after a few days. This is not the case in cultures lacking IL-3. Therefore, an important function of IL-3 may be to recruit an adherent accessory cell type from the pool containing precursors of the B-cell as well as myeloid lineages. This view is further supported by experiments on the generation of colonies containing antibody secreting B-cells from day 15 fetal liver precursors which depends on soluble products secreted by aBM cells. When aBM cells established in the absence of IL-3 are present, more than one cell type (or cell product) is limiting. However, if aBM cell layers are generated in the presence of IL-3, only B-cell precursors seem to be limiting. Since macrophages play an important role in the aBM population, the effect of CSF-1 was investigated. Even though CSF-1 potentiates the effect of IL-3 and IL-1, it cannot replace these interleukins. Like IL-3, it may influence B-cell differentiation in an indirect manner by modifying the microenvironment. Another important function of macrophages seems to be related to the production of C3, which binds to CR2 after degradation. P14, a peptide of the CR2 binding C3d fragment, strongly inhibits maturation of B-cell progenitors. A larger CR2 binding peptide, P28, is inhibitory at low concn but stimulatory at higher concn. It is assumed that aggregated P28 may cross-link with CR2 and thereby transfer a differentiation signal to the cell.