Dendritic cells (DCs) are crucial components of the immune system because of their unique ability as antigen-presenting cells for the initiation of a primary immune response. DCs, macrophages (Ms) and granulocytes (Gs) are believed to originate from a common myeloid progenitor cell. However, little is known about the molecular mechanisms leading to DC sublineage commitment. To establish a cell system that allows the molecular and biochemical analysis of DC differentiation and activation, we used the murine non-leukaemic, multipotential stem cell line FDCP-mix. FDCP-mix cells were cultured in various amounts of GM-colony stimulating factor (CSF) and interleukin (IL)-4 for up to 16 d and analysed for morphology, expression of CD34, c-kit, Gr-1, Mac-1, CD40, MHC-I, MHC-II and co-stimulatory molecules (CD80, CD86) using flow cytometry, and for their capacity to present foreign antigen to autologous T cells. Up to d 7, the majority of FDCP-mix cells consisted of cells differentiating along the G and M lineage. Thereafter, the number of dendritic cells increased until d 13. Differentiation along the DC lineage vs. the G and M lineage was favoured when FDCP-mix cells were cultured in high concentration GM-CSF (500 U/ml) throughout the culture and IL-4 from d 9 onwards. The dendritic cells generated from FDCP-mix cells were large, non-adherent cells with veiled processes and expressed MHC II, CD40, CD80 and CD86. After pulsing with a foreign antigen (keyhole limpet haemocyanin), FDCP-mix-derived dendritic cells stimulated [(3)H]-thymidine incorporation of naive T-cells in an autologous mixed lymphocyte reaction (MLR). Our results show that functionally mature dendritic cells are generated from the multipotential stem cell line FDCP-mix. This cell line thus provides the unique possibility of establishing multipotential transgenic cell lines capable of differentiation along the DC lineage. The experimental system described here should prove a valuable tool for studying DC differentiation and function.