Molecular cloning has revealed that erythroid potentiating activity (EPA) and tissue inhibitor of metalloproteinases (TIMP) represent two distinct activities of a single protein. We have studied the expression of the EPA/TIMP gene at the mRNA and protein levels during 12-O-tetradecanoyl-phorbol-13-acetate (TPA)-induced megakaryoblastic differentiation of K562 human chronic myeloid leukemia cells. Northern hybridization analysis showed that the EPA/TIMP mRNA was increased within 3 hours of TPA-induction and reached maximal levels (about 50-fold induction) during the first day of treatment. The expression of mRNAs for two major metalloproteinases, collagenase-I and stromelysin, were activated in parallel in the differentiation-induced K562 cells. The increase of EPA/TIMP mRNA correlated with increased EPA/TIMP protein biosynthesis and secretion: the TPA-induced cells secreted substantially enhanced amounts of metabolically labeled proteins, of which EPA/TIMP represented up to 50% after the first day of treatment (over 100-fold induction). The induction of EPA/TIMP mRNA was associated with its increased transcription. EPA/TIMP induction required continuous protein synthesis, being completely inhibited by addition of the protein synthesis inhibitor cycloheximide simultaneously with TPA, but only partially inhibited in a time-dependent manner if cycloheximide was added after TPA. Unlike in other cells tested, the jun and c-fos transcription factor mRNAs showed a prolonged biphasic induction response in K562 cells during TPA treatment. This response was associated with enhanced activity of a transfected recombinant reporter plasmid containing binding sites for the jun/fos transcription factor complex (AP-1) similar to the TPA-responsive element (TRE) sequence we found in the EPA/TIMP gene promoter. We suggest that the induction of EPA/TIMP and several other genes specific for the differentiating K562 cells may be a consequence of the sustained activation of immediate early genes encoding transcription factors, such as jun and c-fos.