The J2E cell line is a novel erythroid cell line that differentiates in response to erythropoietin (Epo), the physiologic stimulus for erythropoiesis. After exposure to Epo, the cells synthesize hemoglobin, and we show here that this process is tightly linked to increases in cellular proliferation and DNA synthesis. The hormone-induced terminal differentiation also results in morphologic alterations and the accumulation of transcripts for alpha, beta maj, and beta min globins. c-myc messenger RNA levels increase rapidly after exposure to Epo and precede the increase in cell division, while c-myb undergoes a transient decrease. Differentiation of J2E cells can also be achieved with sodium butyrate, but, in contrast with Epo, this is associated with a retardation of replication and a sudden decrease in c-myc levels. These results show that, in this system, chemically induced differentiation differs from terminal maturation promoted by Epo and that the processes of proliferation and differentiation in J2E cells can be uncoupled.