The K562 leukemia cell line is bipotential for erythroid and megakaryoblastic differentiation. The phorbol ester 12-O-tetradecanoylphorbol-13-acetate (TPA) activates a genetic program of gene expression in these cells leading to their differentiation into megakaryoblasts, a platelet precursor. Thus, K562 cells offer a means to examine early changes in gene expression necessary for megakaryoblastic commitment and differentiation. An essential requirement for differentiation of many hematopoietic cell types is the down-regulation of c-myc expression, because its constitutive expression blocks differentiation. TPA-induced differentiation of K562 cells causes rapid down-regulation of c-myc expression, due in part to an mRNA decay rate that is 4-fold faster compared with dividing cells. A cell-free mRNA decay system reconstitutes TPA-induced destabilization of c-myc mRNA, but it requires at least two components for reconstitution. One component fractionates to the postribosomal supernatant from either untreated or treated cells. This component is sensitive to cycloheximide and micrococcal nuclease. The other component is polysome-associated and is induced or activated by TPA. Although in dividing cells c-myc mRNA decays via a sequential pathway involving removal of the poly(A) tract followed by degradation of the mRNA body, TPA activates a deadenylation-independent pathway. The cell-free mRNA decay system reconstitutes this alternate decay pathway as well.