A transgenic SCID (TG-SCID) mouse expressing the human cytokines interleukin-3 (IL-3) and granulocyte-macrophage colony-stimulating factor (GM-CSF) has been generated with the aim of making a model system allowing the in vivo proliferation of human hematopoietic cells. Using TG-SCID mice expressing high levels (30-35 ng/ml in the serum) of human GM-CSF and IL-3, we attempted to engraft a human myeloid leukemia cell line, F-36P, derived from a myelodysplastic syndrome (MDS) patient. When F-36P cells were transferred intravenously into sublethally irradiated TG-SCID mice, extensive proliferation of F-36P cells was found 4-6 wk later. Successful engraftment, however, required the preadministration of a monoclonal antibody to mouse interleukin-2 receptor (IL-2R) beta chain, neutralizing NK activity. Surprisingly, all the transplanted TG-SCID mice engrafted with F-36P cells developed hind leg paralysis approximately 6 wk after transfer. Histological analysis demonstrated extensive invasion and formation of osteolytic lesions by the F-36P cells in the vertebrae. These data indicate that transgenic SCID mice expressing human IL-3 and GM-CSF provide a useful system for the study of human leukemia. In addition, NK cells appear to play an important role in rejection of human cells.