There are different macrophage- and granulocyte-inducing (MGI) proteins. Normal myeloid precursors are induced to multiply by one form (MGI-1) and to differentiate by another form (MGI-2). There are clones of myeloid leukemia cells that no longer require MGI-1 for growth but can still be induced to differentiate by MGI-2. After induction of differentiation in these leukemia cells by adding MCI-2 or inducing endogenous production of MGI-2 by lipopolysaccharide, the differentiating leukemia cells, like normal cells, again required MGI-1 for growth. This growth requirement for MGI-1 could not be substituted for by adding other protein growth factors such as epidermal, fibroblast, or nerve growth factor or insulin. Induction of differentiation in these leukemia cells by dexamethasone, arabinonucleoside (cytosine arabinoside), or methotrexate instead of by MGI-2, did not restore the requirement of MGI-1 for growth. Mutant myeloid leukemia cells that could not be induced to differentiate by MGI-2 also did not show this restoration of the requirement of MGI-1 for growth. MGI-1 in normal cells induced cell growth and also induced MGI-2, so that the cells could then differentiate by the endogenously produced MGI-2. However, MGI-1 did not induce production of MGI-2 in the leukemia cells, even though they again required MGI-1 for growth, so that there was no induction of differentiation after adding MGI-1. This lack of induction of differentiation-inducing protein by growth-inducing protein has thus identified an effective mechanism for uncoupling of growth and differentiation in malignant cells.