Ectopic expression of the erythropoietin receptor (Epo-R) in Ba/F3, an interleukin-3 (IL-3)-dependent progenitor cell line, confers both Epo-dependent cell growth and Epo-dependent induction of beta-globin mRNA. We have used this system of limited erythroid differentiation to characterize the role of the Epo-R in differentiation. In particular, we have been interested in identifying a differentiation domain of the Epo-R. We have studied three chimeras encoding regions of the extracellular region of the Epo-R and the intracellular region of the IL-3R beta IL-3. After transfection into Ba/F3 cells, all three chimeras conferred Epo-dependent growth and induced the expression of beta-globin, suggesting that the extracellular region of the Epo-R plays a critical role in differentiation. However, a truncated Epo-R containing only the extracellular region of the Epo-R and a 15 amino acid cytoplasmic tail does not induced beta-globin expression, although it is processed to the cell surface and binds Epo. These experiments show that the extracytoplasmic region of the Epo-R is necessary but not sufficient to induce erythroid-specific differentiation in this system.