A large number of low molecular weight polar cryoprotective agents have recently been found to induce erythroid differentiation of Friend leukemic cells in vitro. The effect of these agents on membrane fluidity in phospholipid vesicles was studied by determining the solid-to-liquid crystalline phase transition using differential scanning calorimetry. Some of the inducing agents studies were found to raise the normal transition temperature (Tc) by a few degrees. All of these agents were found to produce a separate transition at a much higher temperature. Changes in the head group of the phospholipid, the pH, the presence of divalent cations, and the addition of other membrane-active compounds were found to significantly influence the inducing agent's effects on the Tc of phospholipid membranes. The ability of the different agents to produce a new transition at a high temperature was found to correlate well with their ability to induce Friend leukemic cell differentiation. The possible mechansims of action of the chemical inducers, and the significance of the observed membrane effects on differentiation and malignancy are discussed. It is concluded that inducing agents decrease the fluidity and stabilize phospholipid membranes, and that their effects in cell differentiation might be initiated by a similar change in the properties of cell membranes.