The maturation process of leukemic myelomonocytoid cells derived from peripheral blood of two typical cases of chronic myelomonocytic leukemia was investigated in vitro. In both cases, liquid culture of the leukemic cells in the presence or absence of 12-o-tetradecanoyl phorbol-13-acetate yielded either monocyte-macrophages or mature granulocytes, respectively, when examined by May-Giemsa staining. However, using cytochemical criteria, both of these mature cell fractions were found to be he-terogenous and still contained substantial numbers of cells positive for both nonspecific and chloroacetate esterases. Phagocytic activity was markedly defective in the monocyte-macrophages recovered from culture as well as in freshly-isolated peripheral monocytes in both patients. In addition, active oxygen production from isolated monocytes stimulated by zymosan was also decreased in one of the cases. The results indicate that at least in some cases of chronic myelomonocytic leukemia, leukemic cells have the potential to differentiate in vitro to monocyte-macrophages which, however, show only limited development of functions, as well as freshly-isolated monocytes from peripheral blood.