A continuous chicken erythroblast cell line transformed by the temperature-sensitive mutant ts34 of avian erythroblastosis virus was developed. This cell line, designated HD3, could be induced to terminally differentiate by shift to the nonpermissive temperature. The differentiated cells resembled erythrocytes as judged by morphology, expression of hemoglobin as determined by benzidine staining and radioimmunoassay, and by the expression of differentiation-specific cell surface antigens. Terminal differentiation was dependent on an erythropoietin-like activity present in anemic chicken serum. In contrast, induction of differentiation in the same cells by butyric acid was erythropoietin independent and did not lead to the formation of erythrocytes. In addition, we found that the responsiveness to temperature inducibility and to butyric acid could be dissociated in variant sublines of HD3 and that both types of differentiation inducers appear to act via different pathways.