Ten patients with acute leukemia after primary myelodysplastic syndrome (MDS-AL) were examined to clarify the biologic nature of the leukemic cells in comparison with that of de novo acute myelocytic leukemia (AML). The morphologic and cytochemical features of the leukemic cells from all these patients corresponded well to those of de novo AML, and they were diagnosed with MDS-AML. Phenotypically, the frequent expression of the lymphocyte activation antigens, CD25 and CD30, was characteristic in MDS-AML. The in vitro response of MDS-AML cells to various growth factors was similar to that of de novo AML cells. Transforming growth factor beta 1 (TGF beta 1) suppressed growth factor- dependent colony formation by normal bone marrow cells, MDS bone marrow cells, and de novo AML cells, but did not inhibit colony formation by MDS-AML cells. The number of TGF beta 1 high-affinity binding sites of MDS-AML samples (< 5 to 47 sites/cell) was markedly lower than that in de novo AML samples (120 to 221 sites/cell). Our results indicate that the reduced TGF beta 1 may represent disregulation of the proliferation system in MDS-AML cells. This is thought to occur during the MDS phase, and may be related to the poorer response shown to conventional chemotherapy of AML.