Bone marrow lymphoblasts from 109 children admitted with untreated acute lymphoblastic leukemia (ALL) were tested for spontaneous rosette formation with sheep erythrocytes. Twenty-six children (24%) had lymphoblasts that formed rosettes (E+). Of 13 initial clinical characteristics, 8 were significantly associated with E+ lymphoblasts: mediastinal enlargement (86% of patients E+), leukocyte counts over 100 X 10(9)/liter (65% E+), nodes greater than 2 cm in any diameter (65% E+), age over 5 yr (46% E+), hemoglobin over 8 g/dl (44% E+), hepatomegaly greater than 5 cm (38% E+), boys (35% E+), and lymph node enlargement outside of the cervical area (28% E+). Spleen size, initial platelet counts, and periodic acid-Schiff scores did not distinguish E+ from E- patients. Since few patients were black and few presented with central nervous system leukemia, the association of these two characteristics with E+ blasts could not be determined. A hierarchical classification scheme and a linear logistic regression model were used to define the patterns of characteristics associated with E+ lymphoblasts. The initial clinical characteristics and the poorer course of E+ patients suggest that ALL comprises at least two biologically and clinically distinct types. The E+ ALL may result from a leukemic transformation of a non-Hodgkin lymphoma.