Gram-positive bacteria are recognized pathogens in urinary tract infections. Cellular mechanisms triggered by lipoteichoic acids (LTs), cell well components of gram-positive bacteria, have not been completely defined. We have postulated that infection-induced altered function of progenitors of urothelial cells residing in the basal layer is likely to have long lasting effects on the architecture and function of the urothelium. Our recent studies in vitro showed that treatment of poorly differentiated urothelial cells of basal type with LT from Streptococcus faecalis (LT-2) stimulated rapid proliferation of a subpopulation of progenitors of urothelial cells, supporting this possibility (Elgavish et al., 1996, J. Cell. Physiol., 169:42-51). The hypothesis underlying the present studies was that, following LT-triggered increase in proliferation of progenitors, the rate of differentiation of the resulting progeny was also stimulated. We proposed that this mechanism may allow rapid removal of cells from the injured area and replacement by cells that have not been exposed to infection. To simulate in vitro conditions in the basal layer that inhibit terminal differentiation, cells grew on fibronectin or collagen-coated substrate, in medium containing low Ca2+ (0.2 mM) and low levels of growth factors (0.005% bovine pituitary extract [BPE]). During the last 3 days in culture, cells grew in the same low Ca2+ (0.2 mM) medium, but without BPE, with or without LT-2. In a positive control group, cells grew during their last 3 days in culture in medium without BPE and LT-2 but in which levels levels of Ca2+ were higher (2 mM), a condition known to stimulate differentiation in other cell types. Several lines of evidence supported the possibility that long-term treatment with LT-2 stimulated progression of large colonies (i.e., the progeny resulting from LT-triggered proliferation) to a more differentiated state: (1) the rate of their differentiation, determined by criterion of intense cytokeratin 8 expression, was increased; (2) steady-state level of beta mRNA and expression of beta 1 subunit of integrins at the protein level were inhibited; (3) in contrast to large colonies in control cultures, the entire population of LT-2-treated large colonies contained beta 1 integrins distributed at cell-cell contacts. Raising extracellular Ca2+ concentration to 2 mM induced similar effects, suggesting that LT-2 may act by stimulating an increase in intracellular levels of Ca2+. However, further studies will be needed to elucidate the molecular mechanisms underlying the stimulatory effect of LT-2 on proliferation of progenitors of urothelial cells in the basal layer of the urothelium and subsequent differentiation of their progeny. We propose that these processes may have a causative role in the pathological changes that occur in the aftermath of chronic or recurrent suburothelial infection in the urinary bladder.