The c-myc gene product is a nuclear protein expressed in a wide variety of cell types. It has been implicated in the control of normal cell growth as well as transformation, but its exact function is unknown. When the human promyelocytic leukaemia cell line HL60 is treated with retinoic acid, the cells differentiate into granulocytes, and there is a reduction in steady state c-myc RNA of more than 10-fold. Nuclear runoff assays show that this reduction is caused by a corresponding decrease in the transcription of exon 2. However, only a minor decrease in exon 1 transcription is observed upon differentiation. In undifferentiated HL60 cells there is an approximately 3-fold molar excess of exon 1 transcription over exon 2, and this excess increases to about 15-fold in differentiated cells. This observation suggests that a major component of c-myc transcriptional down-regulation in HL60 cells is at the level of elongation rather than at the level of initiation. The position of the elongation block was mapped to the region of the boundary between exon 1 and intron 1. During HL60 differentiation, a DNase I hypersensitive site in the chromatin about 300 bases downstream of the 5' end of of intron 1 increases in intensity relative to other sites, possibly reflecting events associated with the termination of transcription. Our runoff analysis also revealed transcription of both strands immediately upstream of exon 1 in HL60 cells. The sense strand transcription of this region produces a novel c-myc RNA which initiates several hundred bases upstream of the previously defined promoters and is found in a variety of cell types.