To determine the mechanism by which acute myelogenous leukemia (AML) cells suppress normal marrow granulopoiesis, diffusion chambers containing Wistar/Furth (W/Fu) rat marrow cells, peritoneal exudate (PE) macrophages or W/Fu AML clone-3 cells were implanted intraperitoneally into syngeneic irradiated rats. Growth of each population over 21 days in single or double diffusion chambers (in which cell populations were separated by a Nucleopore filter) was compared to that of mixed populations. Double diffusion chamber culture of homologous or heterologous combinations had no detectable effect on growth kinetics of any of the three cell populations compared to single chambers. In contrast, normal granulocyte proliferation was significantly depressed by single chamber co-cultivation with one tenth the number of PE macrophages or AML cells. Mixing PE macrophages with AML cells produced no preferential population suppression. AML cells differentiation was not detected under any set of conditions. These studies demonstrate that physical contact with proliferating normal macrophages as well as AML cells will suppress granulopoiesis in diffusion chambers.