We previously demonstrated that an acidic variant form of lysosomal arylsulfatase B accumulated in chronic myelogenous leukemia (CML) cells was highly phosphorylated at its carbohydrate moiety (Uehara Y, et al, Cancer Res 43:5618, 1983). Since lysosomal hydrolases including the sulfatase underwent the posttranslational phosphorylation processing at the carbohydrate moiety, we investigated two enzymes acting on the processing in peripheral leukocytes from leukemia patients. The activity level of the first enzyme in the processing, an N- acetylglucosamine-1-phosphotransferase to form phosphodiester at the carbohydrates, was significantly higher in CML cells than in normal control. The transferase level in CML cells was also higher compared with that in normal bone marrow cells, which include myeloid progenitor cells. However, the activity of the second processing enzyme, a phosphodiester glycosidase that converts a phosphodiester to a phosphomonoester, showed no consistent change in CML cells. Thus, increment of the sulfatase variant containing phosphomonoesters and diesters in CML cells is most probably associated with elevated activities of the phosphotransferase. In two cases of CML in blastic crisis and a case of acute myelogenous leukemia (AML), activity of the processing enzyme was considerably decreased concomitant with reduction of peripheral blastic cells by chemotherapy.