The pathogenesis of JCML was studied in 9 pts. Using cell cultures and chromosome markers, marrow and peripheral blood consistently showed 2 features: impaired expression of normal hematopoietic progenitors (CFU-E, BFU-E, CFU-GEMM), and excessive clonal proliferation of monocyte-macrophage elements whose growth was independent of added CSA or an adherent cell fraction. In contrast, 5 adult CML's (Phl+) showed normal hematopolesis in vitro and CSA-dependent CFU-C growth similar to controls. Using monoclonal antibodies, cloned JCML cells were positive for surface antigens Ia, Mo2, LeuM1, LeuM3, and OKM1, thus confirming monocytic lineage. Characterization studies on cloned cell populations revealed a wide spectrum of features, some mature (latex ingestion, non-specific esterase positive, sensitivity to growth inhibition by PGE2 and to gene-cloned interferon), and some primitive (negative for lysozyme, β-glucuronidase, procoagulant activity, and plasminogen activator). Functionally, JCML cells markedly impaired hematopoiesis in vitro from normal marrow; thus, co-cultures of normal marrow with JCML adherent cells, or fresh JCML marrow, or JCML plasma, resulted in suppressed normal colony formation. We conclude that JCML is a malignant clonal disorder of monocytic lineage, and that cell cultures provide a reliable and specific diagnostic test. The mechanism of hematopoietic failure in JCML is likely mediated by an inhibitory monokine secreted by JCML cells.