A new human diploid cell line, designated PLB-985, has been established from the peripheral blood of a patient with acute nonlymphocytic leukemia (ANLL). Cells of this line are capable of granulocytic and monocytic maturation in the presence of inducing agents. By morphology, the analysis of surface antigens, and cytochemical staining PLB-985 cells are myelomonoblasts. Transmission electron microscopy reveals them to be devoid of neutrophilic primary or secondary granules and to have an open chromatin pattern with frequent nucleoli. The modal karyotype of the line is 46,XX, with no consistent marker chromosomes or recognizable translocations. Myelomonoblasts of this line form colonies in soft agar and induce tumors (chloromas) in nude mice. Growth of the cells in the presence of dimethyl sulfoxide, cis-retinoic acid, or dibutyryl cyclic adenosine monophosphate results in granulocytic maturation as determined by morphology, histochemical staining characteristics, and incorporation of 35S-methionine into the neutrophil primary granule proteinases elastase and cathepsin G. The tumor-promoting phorbol ester phorbol myristate acetate induces PLB-985 cells to differentiate as monocytes. Cells grown in the presence of this agent rapidly become adherent to plastic, display markedly increased phagocytosis of latex particles, stain positively for alpha- naphthyl acetate esterase, and lose the ability to synthesize the neutrophilic proteinases. Induction of differentiation along either pathway is accompanied by a marked decrease in myc oncogene transcription.