The DIFs are a family of secreted chlorinated molecules that control cell fate during development of Dictyostelium cells in culture and probably during normal development too. They induce stalk cell differentiation and suppress spore cell formation. The biosynthetic and inactivation pathways of DIF-1 (the major bioactivity) have been worked out. DIF-1 is probably synthesised in prespore cells and inactivated in prestalk cells, by dechlorination. Thus, each cell type tends to alter DIF-1 level so as to favour differentiation of the other cell type. This relationship leads to a model for cell-type proportioning during normal development.