Nuclear adenosine diphosphate-ribosyl (ADP-ribosyl) transferase is a chromatin-bound enzyme catalyzing the transfer of ADP-ribose from NAD+ to chromatin proteins. The physiologic function of this covalent modification of chromatin has not been fully established, but roles in both DNA repair and in differentiation have been proposed. We demonstrate that three specific inhibitors of ADP-ribosyl transferase (5-methylnicotinamide, 3-methoxybenzamide, 3-aminobenzamide) inhibit differentiation of human granulocyte-macrophage progenitor cells to the macrophage lineage. Differentiation to the neutrophil-granulocyte lineage is much less affected. The inhibition of macrophage differentiation seems to relate to the ability of these compounds to inhibit ADP-ribosyl transferase. A structural analogue (3- methoxybenzoic acid), which is not inhibitory for the enzyme, did not inhibit macrophage differentiation. Additional evidence for a role of ADP-ribosyl transferase in the differentiation of granulocyte- macrophage progenitors was obtained from experiments in which enzyme activity levels were measured in permeabilized marrow cells. Marrow cell ADP-ribosyl transferase activity increased after 3-hr stimulation by the differentiation/proliferation stimulus--granulocyte-macrophage colony-stimulating activity (GM-CSA). Unstimulated marrow cells showed low or undetectable levels of enzyme activity.