We investigated the effects of Matrine on proliferation by trypan blue exclusion and differentiation by benzidine staining positive cells in K-562 cells, assayed the telomerase activity using PCR-ELISA assay, analyzed cell cycle by fluorescence-activated cell sorter analysis of the DNA content, and also determined the gene expression level of c-myc, N-ras and p53 by northern blot and dot blot analysis. The results showed that with the addition of 0.1 mg/ml Matrine, cell growth was inhibited significantly by 4 days, benizidine-positive cells rose from 1% to 2% in control cells to 15% in treated cells on day 5; treatment of K-562 cells with 0.1 mg/ml Matrine for 5 days resulted in a marked inhibition in telomerase activity, in a manner that correlated with the extent of differentiation; after exposure to Matrine for 72 h, 64.6% cells were arrested in the G1-phase of the cell cycle, the fraction of cells in S-phase had decreased from 56.9% in control cells to 24.4% in differentiated cells, and the levels of N-ras and p53 mRNA were remarkably increased for 24 and 48 h, respectively, c-myc mRNA expression level declined for 24 h and was inhibited significantly for 48 h. Our study confirmed that Matrine plays a significant effect on the inhibition of proliferation cells and inducing differentiation in K-562 cells.