The CD14-dependent and -independent dendritic cell (DC) pathways are instituted simultaneously when CD34(+) progenitor cells are treated with granulocyte-macrophage colony-stimulating factor (GM-CSF)/tumor necrosis factor (TNF) +/- stem cell factor (SCF) (GTS). If TNF activity is neutralized within 48 hours of cytokine exposure, DC development is halted and myelogranulocytic hematopoiesis takes place. In this study, we show that disruption of TNF activity at a later time point produced a distinct alteration within the DC system. Instead of downregulating DC development, treatment of GTS cultures with antibodies to TNF (anti-TNF) on day 3 provoked the selective expansion of the CD14-dependent (monocyte) DC pathway from progenitor cell populations lacking CD14 and CD1a. After an initial decrease in proliferation, anti-TNF produced a rebound in cell growth that yielded intermediate myeloid progenitors exhibiting CD14-dependent DC differentiation potential and CD14(+)CD1a+ DC precursors. Cultures enriched in CD14-dependent DCs were more potent stimulators of a mixed leukocyte reaction, compared with control GTS cultures containing both types of DCs. The intermediate progenitors expanded in the presence of anti-TNF were CD115(+)CD33(+)DR+, long-lived, and displayed clonogenic potential in methylcellulose. When exposed to the appropriate cytokine combinations, these cells yielded granulocytes, monocytes, and CD14-dependent DCs. Antigen-presenting function was acquired only when DC maturation was induced from these myelodendritic progenitors with GM-CSF + interleukin-4 or GTS. These studies show a novel mechanism by which TNF regulates the DC system, as well as providing a strategy for the amplification of the CD14-dependent DC pathway from immature progenitors. Although TNF is required to ensure the institution of DC hematopoiesis from CD34(+) progenitor cells, its activity on a later progenitor appears to limit the development of CD14-dependent DCs.