The results of the present study demonstrate that cells with the morphologic and phenotypic characteristics of blast cells that are obtained from the peripheral blood of patients with newly-diagnosed or recurrent acute myeloid leukemia (AML) can be stimulated by gamma interferon + lipopolysaccharide (IFN/LPS) to mediate in vitro cytolysis of an NK-insensitive hepatoma cell line. The conditions of IFN/LPS induction and subsequent assessment of cytotoxicity that were employed were identical to those used conventionally to test macrophage-mediated tumor cell cytotoxicity. What was totally unexpected was that these same blast cells, in the absence of stimulation with IFN/LPS, were also found to mediate high levels of spontaneous cytotoxicity against autologous bone marrow cells and against the U937 human promonocytic leukemia cell line in vitro. This high level of spontaneous cytotoxicity against autologous bone marrow or U937 promonocytic leukemia cells was not enhanced by IFN/LPS or MCSF under conditions that stimulated cytotoxic function in normal blood monocytes and was markedly reduced by pretreatment of the blast cells with IL2 under conditions that induced potent NK/LAK-mediated cytotoxicity. Neutralizing antibodies against TNFalpha and/or IL1alpha/beta eliminated the cytolytic function of blast cells against autologous bone marrow or U937 promonocytic leukemia targets. These findings demonstrate the existence of a population of cells with the morphologic characteristics of blast cells in the peripheral blood of AML patients which has the capacity to mediate spontaneous cytolysis of autologous bone marrow cells or a promonocytic leukemia cell line. These cells may be an immature variant of normal precursors produced as a consequence of the disordered hematopoietic environment in the marrow of AML patients. Alternatively, this function may be mediated by a subset of the leukemic blasts themselves.