Various aspects of the interferon (IFN) system were studied in malignant cells from 37 unselected patients with acute lymphocytic leukemia (ALL). It was found that leukemic cells from two of 37 patients had a complete loss of alpha- and beta-IFN genes, whereas cells from four of 37 had lost one of the alpha-/beta-IFN alleles. In 25 cases, viable cells were also available for functional studies. Cell clones with loss of one of the alpha-/beta-IFN alleles produced low amounts of IFN after virus induction in vitro. Some clones with an apparently normal set of IFN genes were unable to produce detectable amounts of IFN. All clones studied were found to carry high-affinity alpha-IFN receptors. In clones carrying deletions of IFN genes, the cells were sensitive to IFN in vitro as measured by alpha-IFN-induced enhancement of 2',5'-oligoadenylate synthetase (2',5'-A synthetase). Cells from four patients with an apparently normal set of IFN genes were insensitive to this effect of IFN. We conclude that of the 17 patients in which IFN genes, IFN production, alpha-IFN receptors, and IFN-induced enhancement of 2',5'-A synthetase were studied, nine (53%) showed some abnormality in their IFN system. This finding may add some support to the hypothesis that defects in the IFN system could be a step on the path to malignant transformation in ALL. Moreover, patients whose malignant cells carry IFN gene deletions or other defects in their IFN-producing capacity, but are still sensitive to exogenous IFN, could represent a subgroup of ALL with a greater likelihood of responding to IFN therapy.