The t(8;21)(q22;q22) translocation, which fuses the ETO gene on human chromosome 8 with the AML1 gene on chromosome 21 (AML1-ETO), is one of the most frequent cytogenetic abnormalities associated with acute myelogenous leukemia (AML). It is seen in approximately 12 to 15% of AML cases and is present in about 40% of AML cases with a French-American-British classified M2 phenotype. We have generated a murine model of the t(8;21) translocation by retroviral expression of AML1-ETO in purified hematopoietic stem cells (HSC). Animals reconstituted with AML1-ETO-expressing cells recapitulate the hematopoietic developmental abnormalities seen in the bone marrow of human patients with the t(8;21) translocation. Primitive myeloblasts were increased to approximately 10% of bone marrow by 10 months posttransplant. Consistent with this observation was a 50-fold increase in myeloid colony-forming cells in vitro. Accumulation of late-stage metamyelocytes was also observed in bone marrow along with an increase in immature eosinophilic myelocytes that showed abnormal basophilic granulation. HSC numbers in the bone marrow of 10-month-posttransplant animals were 29-fold greater than in transplant-matched control mice, suggesting that AML1-ETO expression overrides the normal genetic control of HSC pool size. In summary, AMLI-ETO-expressing animals recapitulate many (and perhaps all) of the developmental abnormalities seen in human patients with the t(8;21) translocation, although the animals do not develop leukemia or disseminated disease in peripheral tissues like the liver or spleen. This suggests that the principal contribution of AML1-ETO to acute myeloid leukemia is the inhibition of multiple developmental pathways.