The anti-fungal antibiotic, radicicol, produced in the culture broth of Neocosmospora tenuicristata, was found to induce differentiation of HL-60 cells into macrophages from the following evidence: (1) it caused morphological changes into macrophage-like cells, (2) induced NBT (Nitrobluetetrazolium) reduction activity, (3) induced phagocytosis, and (4) induced alpha-naphthyl acetate esterase activity. The concentration of radicicol required to differentiate HL-60 cells is 50-100 ng/ml, and the incubation time required for commitment of differentiation is 16 hours. Flow cytometry analysis indicated that radicicol blocks the cell cycle of HL-60 cells at the G1 and G2 sites. In addition, radicicol induced reversal of the transformed phenotype of ras-transformed NIH3T3 cells (DT cells) at 25 ng/ml.