Granulocyte-macrophage colony-stimulating factor (GM-CSF) induced the proliferation and differentiation of bone marrow cells of normal mice with a concomitant loss of myeloperoxidase activity. The decrease in the enzyme activity was due to a reduced level in the bone marrow cells. These findings indicate that myeloperoxidase is not merely a marker, but may also play a role in the differentiation of stem cells into granulocytes.