Arginase is a nitric oxide synthase-alternative pathway enzyme for L-arginine breakdown leading to biosynthesis of urea and L-ornithine. Evidence suggests that reduction of arginine bioavailability for NO production secondary to increased plasma arginase levels in sickle cell disease, may contribute to severe pathophysiological derangements and increase mortality. Recently, we showed that Chloroquine (CQ), an anti-malarial and anti-rheumatoid drug, displays a linear competitive mode of inhibition on sickle erythrocyte arginase (Iyamu et al., Brit J. Haematol, 2007: in press). Utilizing the K562 cell line as a model system in our present study, we obtained evidence of the anti-proliferative and differentiation effects of CQ and its analog, Hydroxychloroquine (OHCQ) at pharmacologically attainable concentrations (5–20μM). Specifically, CQ (IC50= 8.0 ±1.2 μM) and OHCQ (IC50 =17.0 ± 2.4 μM) inhibited K562 cell proliferation in a dose-dependent manner. This inhibitory effect was accompanied by enhanced commitment towards erythroid maturation as assessed by hemoglobinization (Iyamu et al., Exp Hematol, 2003); this was linked to a dose-dependent inhibition of arginase activity. To assess the role of the arginine-polyamine pathway in the induction of differentiation of K562 cells by CQ or OHCQ, cells were treated with 10 μM CQ or 20 μM OHCQ in the presence or absence of spermine (5μM) or spermidine (5 μM). Our results indicate that spermine and spermidine (intermediate products of the arginine polyamine pathway) partially reverted the effects of CQ and OHCQ on arginase activity. But this reversal did not affect the commitment of K562 cells towards erythroid maturation. We also show that CQ and OHCQ enhanced fetal hemoglobin (Hb F) synthesis by 3.4 and 3.2-fold (vs control), and maximally stimulated intracellular cGMP levels (as determined by immunosorbent assay) by 6.6- and 3.0-fold at 6hrs and 3hrs respectively. The induction of these macromolecules by CQ or OHCQ correlated with arginase inhibition. Again, the partial reversal of arginase activity by spermine or spermidine could not reduce the Hb F induction by CQ or OHCQ. This observation suggests that the commitment of cells towards erythroid maturation precedes the effects of spermine or spermidine on arginase activity. We further investigated the effects of 8-Bromo-cAMP (cAMP analog) on arginase activity in lipopolysaccharide (LPS)-stimulated K562 cells. The inhibitory effect of CQ on arginase was reversed in LPS-stimulated cells but this reversal of arginase activity was not observed in Bromo-cAMP-LPS- treated cells. Moreover, the moderate increase of arginase activity in LPS-treated cells in the presence of CQ failed to reduce the CQ-dependent enhancement of total hemoglobin and Hb F production. Indeed, the combination of 8-Bromo-cAMP with CQ in LPS-treated cells resulted in a significant inhibition (>35%) of arginase activity. This inhibitory effect was associated with a 3.9-fold increase of Hb F synthesis (vs CQ alone) as well as enhancement of total Hb production. This surprising observation demonstrates the possible involvement of the arginase pathway as well as additional, but yet unidentified mechanism(s). In conclusion, these observations that CQ and OHCQ may inhibit the initial step of the arginine-polyamine pathway, resulting in the enhancement of erythroid differentiation may provide a paradigm for targeted therapy of hemoglobinopathies.