Tremendous advances in our understanding of acute leukemia have been made through the development of new technologies and close collaboration between immunologists, molecular biologists, and clinical oncologists. These technological advances have included the development of monoclonal antibodies (MoAb) reactive with surface antigens on leukemic cells which can help confirm the lineage and diagnosis of acute leukemia. More importantly, MoAb in conjunction with morphology and cytochemical stains have led to the identification of FAB-MO and the more common recognition of FAB-M7. MoAbs have also helped define prognostic groups, e.g., T-cell leukemia, mature B-cell leukemia, and rare groups such as CD7+ AML. However, the greatest advances in our understanding of acute leukemia has occurred with the application of genetic techniques. Disregulation of genes responsible for normal growth and differentiation initiates the molecular events that lead to the transformation and proliferation of cells recognized clinically as leukemia. Non-random cytogenetic abnormalities apparently contribute to this gene disregulation and specific abnormalities are associated with clinically important subgroups. In acute lymphoblastic leukemia (ALL), the t(9;22), t(1;19), and t(4;11) appear to have a poor prognosis. In acute myeloblastic leukemia (AML), -7/7q-;-5/5q-, 11q23 abnormalities have poor outcomes while t(15;17) and in some series t(9;11), t(8;21), and inv(16) have a good response to therapy. Molecular studies of somatic cell (immunoglobulin and T-cell receptor) gene rearrangements have assisted in the diagnosis and classification of ALL. The application of the polymerase chain reaction technique to specific gene rearrangements has provided a useful approach to minimal residual disease. Specific gene activation (N-myc, evi-1) or fusion genes such as the alpha retinoic acid receptor (alpha RAR) and pml have been identified as the specific cause of some cases of leukemia. The cloning of specific chromosomal breakpoints identified in leukemia (as has been done for CML) will result in specific probes which can be used to make the diagnosis rapidly at the molecular level. Because of the tremendous number of recent developments, this paper will focus only on major developments that will soon have a clinical impact.