Anti-thymocyte globulin (ATG), a horse antiserum to human thymus tissue, has been shown to induce granulocytic differentiation of the HL-60 human leukemia cell line. In this paper we describe the effect of ATG on leukemic blasts and its effect on other human leukemia cell lines in vitro. The in vitro differentiation effect of ATG was observed in blasts from two patients with leukemia and the human leukemia cell line K562. The differentiation effect of ATG was attributable to its preservative, thimerosal, separable from ATG by high pressure liquid chromatography or dialysis. Subsequent studies with thimerosal alone showed it to induce differentiation in leukemic blasts from three patients and the human leukemia cell lines U937, K562, and KG-1. The differentiation effect of thimerosal is blocked by a sulfhydryl-protective agent, dithiothreitol, suggesting that the mechanism of differentiation may be mediated via a sulfhydryl group-dependent process.