A new human leukemia cell line, designated as ME-1, was established from the peripheral blood leukemia cells of a patient with acute myelomonocytic leukemia with eosinophilia (M4E0). This cell line has the characteristic chromosome abnormality of M4E0, inv(16) (p13q22). When cultured in RPMI 1640 medium containing 10% fetal calf serum, ME-1 cells were monoblastoid, but with the addition of cytokines such as interleukin-3 (IL-3), granulocyte-macrophage colony-stimulating factor (GM-CSF), IL-4, or medium conditioned by phytohemagglutinin-stimulated human peripheral leukocytes (PHA-LCM), the cells exhibited differentiation to macrophage-like cells. PHA-LCM also promoted eosinophilic-lineage differentiation of this cell line, although IL-5 did not do so. To elucidate the mechanism of proliferation and differentiation of ME-1 cells, we studied the effect of a potent inhibitor of protein kinase C, 1-(5-isoquinolinyl-sulfonyl)-2- methylpiperazine (H-7), on colony formation of ME-1 cells. H-7 inhibited colony formation of ME-1 cells by IL-3 or GM-CSF dose dependently, but had little inhibitory effect on colony formation by IL- 4. These results indicate that the proliferation and differentiation of ME-1 cells by IL-3 or GM-CSF were related to the activation of protein kinase C, while those by IL-4 involved other regulatory systems. ME-1 cells should be useful for studying the pathogenesis of M4E0 and the mechanisms of proliferation and differentiation of leukemic and normal progenitors by cytokines.