The combination of granulocyte-macrophage colony stimulating factor (GM-CSF) and interleukin-4 (IL-4) induces the growth of antigen-presenting cells (APC) from adherent peripheral blood leukocytes. These cells have been characterized as dendritic cells (DC), yet many questions exist regarding their relationship to other DC populations and the nature of their progenitors. To address these issues, we utilized a combination of immunomagnetic depletion, cell sorting, and cell culture to isolate four distinct APC populations; macrophages expressing high levels of CD14 (CD14bright macrophages), DC produced by culturing adherent cells in GM-CSF and IL-4 (cultured DC), and two different subsets of fresh DC that express low levels of CD14 (CD14dim DC). Each population exhibited a unique morphology and a unique profile of cell surface markers. In contrast to macrophages,all three DC populations expressed the DC marker CD83, as well as highlevels of MHC molecules and the costimulatory molecules B7-1 (CD80) and B7-2 (CD86). In addition. all three DC populations presented soluble tetanus toxin antigen and stimulated T cell proliferation to levels far superior to that of macrophages. Blocking studies demonstrated a costimulatory role for B7-1, B7-2, and CD40 in antigen presentation, although B7-2 expression was the single most important factor. To identify the progenitors of cultured DC, we sorted the adherent fraction of PBMC into discrete subpopulations prior to exposure to GM-CSF and IL-4. DC activity derived entirely from CD14+ precursors and was equally demonstrable using either the CD14dim or CD14bright subsets. Although these DC precursors lost expression of CD14 in culture, they maintained most of their other myeloid features. We conclude that human CD14+ leukocytes acquire the phenotype and function of DC when cultured in GM-CSF and IL-4.