Natural killer (NK) cells were implicated recently in resistance to primary, as well as metastatic, tumor growth and in rejection of allogeneic bone marrow transplants. This prompted us to study NK cell cytotoxic potential in patients with acute (AML) and chronic (CML) myelogenous leukemia and to investigate the involvement of NK cells in bone marrow graft rejection in mice. Studies in patients with AML and CML demonstrated that these patients have a defect in NK cell cytotoxic potential against K-562 target cell line. The observation that patients with pre-leukemic disorders also have a defective NK cell cytotoxic system suggests that NK cell defect is primary rather than secondary to leukemic disease. Analysis of NK cell defect in these patients revealed multiple defects in NK cell lytic machinery, as represented by low tumor-binding potential, lack of recycling capacity and low numbers of NK cells, as determined by morphological criteria. These observations suggest that NK cell defect in AML and CML patients could underlie the leukemic disease. In the area of bone marrow transplantation, we have provided direct evidence for the involvement of NK cells in natural resistance to murine allogeneic bone marrow transplants. We demonstrated that a single i.v. injection of 0.4 ml of NK 1.1 antiserum significantly reduced in vitro NK cell cytotoxic potential to YAC-1 and, concomitantly, prevented rejection of allogeneic bone marrow transplants in vivo. NK 1.1 antiserum was effective in diminishing both of these functions when injected 2 to 24 hours before transplantation and NK cell assay. As a specificity control, we investigated the effect of specific anti-T cell-directed monoclonal antibodies, Thy-1.2 and Lyt-2.2 in the same systems. Neither of these antibodies exerted any effect on NK cell cytotoxicity to YAC-1 or on rejection of allogeneic bone marrow transplants. These studies indicate that NK cells represent one of the components of bone marrow graft rejection mechanism.