We have previously observed that the interaction of an oxidant generated by polymorphonuclear leukocytes (PMNs) with (+-)-trans benzo[a]pyrene-7,8-dihydrodiol (BP-7,8-diol) resulted in covalent binding to DNA and elicited bacterial mutagenesis (PNAS 82:5194, 1985). We now report that this interaction also induces sister chromatid exchanges (SCEs) in Chinese hamster V-79 cells. This genotoxic response required stimulation of the PMNs by phorbol ester as no effect was observed with unstimulated cells. Likewise, no intrinsic activity of BP-7,8-diol alone was noted. The addition of azide, CuDIPS, or taurine markedly inhibited the induction of SCEs by the combination of BP-7,8-diol and stimulated PMNs, further suggesting the involvement of myeloperoxidase in the activation of the polycyclic aromatic hydrocarbon. The (-) isomer of BP-7,8-diol as well as 7,8-dihydro-BP were more active than (+)-BP-7,8-diol in inducing SCEs. By contrast, benzo[a]pyrene or derivatives lacking a double bond at the 9,10 position were not effective in inducing SCEs above the level seen with phorbol ester-stimulated PMNs. These observations serve to underscore the potential for myeloperoxidase-dependent activation of xenobiotics by PMNs to result in a localized genotoxic environment.