Occupational exposure to benzene, a major industrial chemical, has been associated with various blood dyscrasias and increased incidence of acute myelogenous leukemia in humans. It is established that benzene requires metabolism to induce its effects. Benzene exposure in humans and animals has also been shown to result in structural and numerical chromosomal aberrations in lymphocytes and bone marrow cells, indicating that benzene is genotoxic. In this review we have attempted to compile the available evidence on the role of increased free radical activity in benzene-induced myelotoxic and leukemogenic effects. Benzene administration to rodents has been associated with increased lipid peroxidation in liver, plasma, and bone marrow, as shown by an increase in the formation of thiobarbituric-acid reactive products that absorb at 535 nm. Benzene administration to rodents also results in increased prostaglandin levels indicating increased arachidonic acid peroxidation. Other evidence includes the fact that bone marrow cells and their microsomal fractions isolated from rodents following benzene-treatment have a higher capacity to form oxygen free radicals. The bone marrow contains several peroxidases, the most prevalent of which is myeloperoxidase. The peroxidatic metabolism of the benzene metabolites, phenol and hydroquinone, results in arachidonic acid peroxidation and oxygen activation to superoxide radicals, respectively. These metabolites, upon co-administration also produce a myelotoxicity similar to that observed with benzene. Recently, we have found that exposure of human promyelocytic leukemia (HL-60) cells (a cell line rich in myeloperoxidase), to the benzene metabolites, hydroquinone and 1,2,4-benzenetriol results in increased steady-state levels of 8-hydroxydeoxyguanosine a marker of oxidative DNA damage. Peroxidatic metabolism of benzene's phenolic metabolites may therefore be responsible for the increased free radical activity and toxicity produced by benzene in bone marrow. We thus hypothesize that free radicals contribute, at least in part, to the toxic and leukemogenic effects of benzene.