Inhibitors of protein-tyrosine kinases (TPKs) from the tyrphostins family induce terminal erythroid differentiation of mouse erythroleukemia (MEL) cells. The most potent tyrphostin was found to be AG-568 which was therefore investigated in more detail. Just prior to differentiation the inhibition of tyrosine phosphorylation of a pp97 protein band was noted. We also found that AG-568 treatment induces the appearance of a putative differentiation factor which could induce tyrphostin-independent differentiation in untreated cells. Our study suggests that the inhibition of tyrosine phosphorylation by AG-568 leads to the production of differentiating factor(s) which induce the MEL cells to differentiate.