Sera from 13 patients with mycosis fungoides and 2 with Sezary syndrome were tested for activity that induces lymphocyte differentiation. Induction of Thy-1.2 antigen and surface immunoglobulin were used, respectively, to measure T- and B-cell differentiation. The indicator cells were null lymphocytes from the spleens of congenitally athymic nude mice. Normal serum induced some T-cell but no B-cell differentiation. The T-cell-inducing activity was ascribed to thymic hormone and declined with advancing age. A totally different pattern emerged with patient serum. T-cell-inducing activity was significantly more active than in normal serum (p less than 0.001). This activity did not decline with advancing age and was not inhibited by a concentration of ubiquitin, which blocks nonspecific beta-adrenergic induction. B- cell-inducing activity was also present. This novel serum factor (or factors) is a potent inducer of T- and B-lymphocyte differentiation and is associated with neoplastic lymphoproliferation of the T-cell series.