The human cell line U-937 has many features suggestive of the monocyte. It may be stimulated in vitro to develop attributes of an activated macrophage with increased phagocytosis and enhanced Fc receptor expression. We describe the establishment of a subclone designated U-937 AG through the use of a mutagenic agent. The features of this subclone include increased tumoricidal cytotoxicity, increased Fc receptor expression for IgG and enhanced phagocytosis of antibody coated erythrocytes, while retaining the usual light microscopic features. The mutant cell line is also capable of producing an erythroid potentiating factor while temporary production of a granulocyte macrophage colony stimulating factor was noted. The availability of a "resting" parent and a more "activated" subclone of this human monocyte cell line should assist in the study of human monocyte activation.