The present work shows that addition of mouse beta interferon (IFN) to murine bone marrow cells cultured in the presence of pokeweed mitogen‐spleen‐CM results in an increase in the proportion and number of diffuse colonies. Addition of IFN early in the culture period inhibits the development of the cytotoxic capacity typical for normal diffuse colonies. Addition of IFN late in the culture period, when diffuse colonies have already been formed, enhances the cytotoxic activity of individual colonies. The cellular composition of diffuse colonies was nearly identical in non‐cytotoxic and strongly cytotoxic colonies. It is concluded that IFN profoundly affects development and function of cytotoxic diffuse col