Macrophage precursor cells, enriched in the light fraction of murine bone marrow, were cultured in vitro under the influence of CSF-1 or IL·2 or both cytokines. In the presence of CSF-1 or CSF-1 and IL-2 strong proliferation occurred, whereas in the presence of only IL-2 or medium, cells did not proliferate. Thus all proliferating cells had CSF-1 receptors and thus belonged to the macrophage lineage. IL-2 induced in these cells the formation of cytoplasmic granules and concomitantly NK-like lytic activity. Under high dosage IL-2 cells further differentiated into cells containing abundant amounts of cytoplasmic granules and exerted LAK type cytotoxicity. When IL-2 was withdrawn from the culture medium, cells could be redirected to develop the properties of typical macrophages when CSF-1 was present. Thus the composition of the cytokines surrounding macrophage precursors decides on their differentiation pathway.