Studies on monozygotic twins with concordant leukemia and retrospective scrutiny of neonatal blood spots of patients with leukemia indicate that chromosomal translocations characteristic of pediatric leukemia often arise prenatally, probably as initiating events. The modest concordance rate for leukemia in identical twins ( approximately 5%), protracted latency, and transgenic modeling all suggest that additional postnatal exposure and/or genetic events are required for clinically overt leukemia development. This notion leads to the prediction that chromosome translocations, functional fusion genes, and preleukemic clones should be present in the blood of healthy newborns at a rate that is significantly greater than the cumulative risk of the corresponding leukemia. Using parallel reverse transcriptase-PCR and real-time PCR (Taqman) screening, we find that the common leukemia fusion genes, TEL-AML1 or AML1-ETO, are present in cord bloods at a frequency that is 100-fold greater than the risk of the corresponding leukemia. Single-cell analysis by cell enrichment and immunophenotype/fluorescence in situ hybridization multicolor staining confirmed the presence of translocations in restricted cell types corresponding to the B lymphoid or myeloid lineage of the leukemias that normally harbor these fusion genes. The frequency of positive cells (10(-4) to 10(-3)) indicates substantial clonal expansion of a progenitor population. These data have significant implications for the pathogenesis, natural history, and etiology of childhood leukemia.