AbstractIn this chapter, Drs. Keating and Willman review recent advances in our understanding of the pathophysiology of acute myeloid leukemia (AML) and allied conditions, including the advanced myelodysplastic syndromes (MDS), while Drs. Goldstone, Avivi, Giles, and Kantarjian focus on therapeutic data with an emphasis on current patient care and future research studies.In Section I, Dr. Armand Keating reviews the role of the hematopoietic microenvironment in the initiation and progression of leukemia. He also discusses recent data on the stromal, or nonhematopoietic, marrow mesenchymal cell population and its possible role in AML.In Section II, Drs. Anthony Goldstone and Irit Avivi review the current role of stem cell transplantation as therapy for AML and MDS. They focus on data generated on recent Medical Research Council studies and promising investigation approaches.In Section III, Dr. Cheryl Willman reviews the current role of molecular genetics and gene expression analysis as tools to assist in AML disease classification systems, modeling of gene expression profiles associated with response or resistance to various interventions, and identifying novel therapeutic targets.In Section IV, Drs. Hagop Kantarjian and Francis Giles review some promising agents and strategies under investigation in the therapy of AML and MDS with an emphasis on novel delivery systems for cytotoxic therapy and on targeted biologic agents.