We have found that medium conditioned by a colony-stimulating factor producing tumor derived from a granulocytosis case with lung cancer contained a factor to differentiate a human promyelocytic leukemic cell line (HL-60) to macrophage-like cells that were butyrate esterase-positive and had phagocytosing activity and membrane Fc receptors. This differentiation-inducing factor was not active for a human myeloblastic cell line (KG-1), and was separated from a colony-stimulating factor by its molecular weight and isoelectric point. The conditioned medium did not contain a detectable amount of gamma interferon when tested by bioassay as well as by radioimmunoassay. This is the first report that a human lung cancer tissue produces not only a colony-stimulating factor, but also a differentiation-inducing factor. The conditioned medium is considered to be a good source of differentiation-inducing factor.