In addition to its inhibitory activity against viral DNA polymerases and reverse transcriptase, the acyclic nucleoside phosphonate 9-(2-phosphonylmethoxyethyl)adenine (PMEA) also markedly inhibits the replicative cellular DNA polymerases alpha, delta, and epsilon. We have previously shown that PMEA is a strong inducer of differentiation in several in vitro tumor cell models and has marked antitumor potential in vivo. To elucidate the molecular mechanism of the differentiation-inducing activity of PMEA, we have now investigated the effects of the drug on cell proliferation and differentiation, cell cycle regulation, and oncogene expression in the human erythroleukemia K562 cell line. Terminal, irreversible erythroid differentiation of PMEA-treated K562 cells was evidenced by hemoglobin production, increased expression of glycophorin A on the K562 cell membrane, and induction of acetylcholinesterase activity. After exposure to PMEA, K562 cell cultures displayed a marked retardation of S-phase progression, leading to a severe perturbation of the normal cell cycle distribution pattern. Whereas no substantial changes in c-myc mRNA levels and p21, PCNA, cdc2, and CDK2 protein levels were noted in PMEA-treated K562 cells, there was a marked accumulation of cyclin A and, most strikingly, cyclins E and B1. A similar picture of cell cycle deregulation was also observed in PMEA-exposed human myeloid THP-1 cells. However, in contrast to the strong differentiation-inducing activity of PMEA in K562 cells, the drug completely failed to induce monocytic maturation of human myeloid THP-1 cells. On the contrary, THP-1 cells underwent apoptotic cell death in the presence of PMEA, as demonstrated by prelytic, intracellular DNA fragmentation and the binding of annexin V to the cell surface. We hypothesize that, depending on the nature of the tumor cell line, PMEA triggers a process of either differentiation or apoptosis by the uncoupling of normally integrated cell cycle processes through inhibition of DNA replication during the S phase.