Colony-stimulating activity (CSA) is a class of protein factors that stimulates the in vitro growth and differentiation of hematopoietic committed stem cells into mature granulocytes and macrophages. In man, production of CSA is mediated by monocytes-macrophages, lymphocyte, and endothelial cells. One of the best studied and most potent sources of CSA is conditioned media derived from cultured human placenta. The cellular source of this placental CSA was studied using cloned term placental cell lines induced by a simian virus 40 (SV-40) Wild-Type (wt) or temperature sensitive (tsA) mutants. Conditioned media from SV- 40 wt-transformed placental cells grown at 37 degrees C and tsA- transformed placental cells grown at 33 degrees C (the temperature at which the cells exhibit the transformed phenotype) and at 40 degrees C (temperature at which the cells express a normal differentiated phenotype) contained high levels of CSA. At the restricted temperature (40 degrees C), these cell lines expressed normal trophoblastic characteristics in that they produced human chorionic gonadotropin, pregnancy-specific-beta1-glyco protein, and placental alkaline phosphatase, indicating that the SV-40 transformation has not interfered with normal cellular functions of these trophoblasts. The CSA released by these cell lines resemble those of CM from fresh placental cells, in that the level of activity is high and that formation of both granulocyte/macrophage and eosinophil colonies is stimulated.