The treatment of human U-937 leukemia cells with 12-O- tetradecanoylphorbol-13-acetate (TPA) is associated with induction of monocytic differentiation. However, the signaling pathways responsible for induction of the differentiated monocytic phenotype remain unclear. The present studies demonstrate that dexamethasone blocks TPA-induced U- 937 cell growth inhibition, adherence, and alpha-naphthyl acetate esterase staining. The results also demonstrate that dexamethasone inhibits the appearance of c-fms transcripts associated with TPA treatment. Run-on transcription assays demonstrated that the c-fms gene is transcriptionally active in uninduced U-937 cells and that the rate of transcription is unchanged after dexamethasone and/or TPA treatment. These findings indicated that TPA increases c-fms expression by a dexamethasone-sensitive posttranscriptional mechanism. Treatment of U- 937 cells with TPA was also associated with stimulation of arachidonic acid metabolism. Furthermore, dexamethasone, an inhibitor of phospholipase A2 activity, blocked TPA-induced increases in arachidonic acid release. These findings suggested that TPA may regulate certain features of monocytic differentiation, such as c-fms gene expression, through the formation of arachidonic acid metabolites. Indomethacin, an inhibitor of cyclooxygenase, had no detectable effect on c-fms gene expression. However, the cyclooxygenase metabolite, prostaglandin E2, inhibited the TPA-induced increases in c-fms mRNA levels. Taken together, the results indicate that TPA regulates c-fms gene expression by a dexamethasone-sensitive mechanism and that c-fms mRNA levels are controlled by metabolites of the arachidonic acid pathway.