P48 is a 48 kDa monocytic differentiation/activation factor previously purified from the conditioned medium of the Reh human pre-B cell leukaemia cell line. It induces growth arrest and differentiation of HL-60 human promyelocytic leukaemia cells along the monocytic pathway and the production of the cytokines interleukin 1, tumour necrosis factor-alpha and interleukin 6 in human monocytes and monocytic cell lines. The cDNA for P48 was cloned from Reh cellular RNA using 3' reverse amplification of cDNA ends. Southern blot probing with P48 cDNA revealed hybridization with DNA from Reh and Molt-4 cells, but not with DNA from human peripheral blood mononuclear cells. Subsequent studies using PCR and Southern analysis revealed P48 sequences in DNA isolated from Mycoplasma fermentans but not M. hominis, M.iowae, M.synoviae or M.lypophilum. Although initial studies using Mycoplasma culture and hybridization techniques had failed to reveal Mycoplasma infection in our Reh and Molt-4 cell lines, subsequent PCR studies using Mycoplasma genus-specific rRNA primrs revealed Mycoplasma sequences in these cell lines. Using the P48 cDNA probe, we isolated a genomic clone from M. fermentans DNA which was found to be 98.5% identical with the P48 cDNA clone, and the deduced amino acid sequence agreed with N-terminal microsequencing data for P48 protein purified from the Reh cell line conditioned medium. The 5' end of the gene has a number of consensus sequences characteristic of prokaryotic genes, and the deduced amino acid sequence has a number of features suggesting that P48 is a lipoprotein. The P48 cDNA was expressed in pMAL in Escherichia coli, and the 60 kDa expressed fusion protein was found to react with anti-P48 antibodies on Western blots. This is consistent with a pMAL fusion protein representing the sum of the 42 kDa maltose-binding protein and 18 kDa of P48 recombinant protein, suggesting that native P48 has significant post-translational modification. Consistent with this, Northern blot studies revealed a single 1 kb transcript. The recombinant fusion protein was found to possess anti-proliferative activity against HL-60 cells, and antibodies against recombinant P48 were found to block the biological activity of native P48 isolated from conditioned medium. These studies demonstrate that P48, a molecule with immunomodulatory and haematopoietic differentiation activities, is derived from M. fermentans or a closely related species. P48 may be important in the pathophysiology of Mycoplasma infections and may be useful in dissecting the mechanisms involved in mammalian haematopoietic cell differentiation, immune function and cytokine biosynthesis.