The effects of mouse L-cell interferon (IFN) on growth of mouse bone marrow cells and their differentiation into macrophages and granulocytes were investigated in a liquid suspension culture system with two different types of colony-stimulating factor (CSF). Within 7 days, most bone marrow cells differentiated into macrophages in the presence of macrophage colony-stimulating factor (M-CSF) derived from mouse fibroblast L929 cells, but into both granulocytes (40%) and macrophages (23%) in the presence of a granulocyte-macrophage colony- stimulating factor (GM-CSF) from mouse lung tissue. IFN inhibited growth of bone marrow cells with both M-CSF and GM-CSF, but had 20 times more effect on bone marrow cells stimulated with M-CSF than on those stimulated with GM-CSF. A low concentration of IFN (50 IU/ml) stimulated production of macrophages by GM-CSF in liquid culture medium, whereas it selectively inhibited colony formation of macrophages in semisolid agar culture. IFN caused no detectable block of late stages of differentiation; mature macrophages and granulocytes were produced even when cell proliferation was inhibited by IFN. These results indicate that IFN preferentially affects growth and differentiation of the cell lineage of macrophages among mouse bone marrow cells.