We have developed a restriction map of the chromosome 21 breakpoint region involved in t(8;21)(q22;q22.3) acute myelogenous leukemia (AML) and have isolated a genomic junction clone containing chromosome 8 and 21 material. Using probes from these regions, rearrangements have been identified in each of nine cases of t(8;21) AML examined. In addition, we have isolated cDNA clones from a t(8;21) AML cDNA library that contain fused sequences from chromosome 8 and 21. The chromosome 8 component, referred to as ETO (for eight twenty-one), is encoded over a large genomic region, as suggested by the analysis of corresponding yeast artificial chromosomes (YACs). The DNA sequence of the chromosome 21 portion of the fusion transcript is derived from the normal AML1 gene. A striking similarity (67% identity over 387 bp, with a corresponding 69% amino acid identity) was detected between AML1 and the Drosophila segmentation gene, runt. The critical consequence of the translocation is the juxtaposition of 5′ sequences of AML1 to 3′ sequences of ETO, oriented telomere to centromere on the der(8) chromosome.