The Friend erythroleukemia cell line was used to study the binding and biological properties of the photosensitizer hematoporphyrin derivative (HPD) on a differentiating system. In addition, the effect of cholesterol hemisuccinate (CHS) enrichment of cell membranes on HPD activity was tested on the same cell system. Differentiation of Friend erythroleukemia cells (FLC) was induced with dimethyl sulfoxide (DMSO) and resulted in a decreased cell volume and an increased rate of hemoglobin synthesis as a function of the duration of DMSO treatment. Differentiated cells seem to bind less porphyrin than their undifferentiated counterparts. Thus, cells treated for 6 days with DMSO bound 30–40% less dye than an identical number of untreated FLC. In contrast, a similar inhibition of both DNA and protein synthesis by photoactivated HPD was evident in either DMSO‐treated or untreated FLC. Enrichment of cell membranes with CHS led to the same degree of protection from the damaging activity of the photoactivated dye in both differentiated and undifferentiated FLC. The decreased binding of HPD to DMSO‐treated FLC is most likely a result of a reduction in cell volume of differentiated cells and is not related to an intrinsic property of the differentiation process.