In studies of the regulation of hematopoiesis, increasing attention has focused on the role of bone marrow stromal cells as rich sources of various cytokines. Present studies indicate that marrow stromal cells and monocytes produce activin A, implicating this new cytokine in the paracrine control of hematopoiesis. Activin A, which was initially recognized as a beta A beta A dimeric gonadal protein, was found to potentiate the proliferation and differentiation of erythroid progenitors; both purified erythroid colony-forming units (CFU-E) and K562 cells possess high affinity receptors specific for activin A. Present studies using Western and Northern blots demonstrate the presence of beta A subunits of activin A in the conditioned medium of monocytes and stromal cells and its RNA transcripts in these cells. The presence of functional and homodimeric beta A beta A activin molecule was confirmed through bioassay with or without a blocking antiserum against activin A or an activin binding protein, follistatin; its presence is further supported by a specific enzyme-linked immunosorbent assay (ELISA) in which a monoclonal antibody reacted only with the beta A beta A dimeric form of this molecule. In other experiments, the production of activin A was found to be regulated by various cytokines and regulators. The production of activin A in monocytes was stimulated more than ninefold by treatment with granulocyte-macrophage colony-stimulating factor (GM-CSF). Activin A expression was also stimulated, albeit less potently, by bacterial lipopolysaccharide (LPS) and gamma-interferon. On the other hand, the expression of activin A in marrow stromal cells was upregulated by incubation with tumor necrosis factor-alpha (TNF-alpha), LPS, and interleukin 1 alpha (IL-1 alpha). Therefore, we propose that the local production of activin A in the microenvironment within bone marrow may fine tune the regulation of steady-state hematopoiesis. In addition, this factor may normally be produced at minimal levels, but under certain situations may be further induced to provide important biological functions.