Acute toxicity to the hematopoietic cell renewal system is a critical side effect of most anticancer agents. Here we compared the effects of FAD-104 to those of the parent compound adriamycin (ADM) and of epi-adriamycin (epi-ADM) on the growth and differentiation of normal as well as leukemic human myeloid progenitor cells. FAD-104 was less toxic to myeloid colony-forming cells (GM-CFU) than ADM or epi-ADM. In addition, FAD-104 but not ADM induced a clonal down-grading in both normal and leukemic blast cells, and it stimulated the terminal differentiation of myeloid leukemia cells. Therefore, FAD-104 may be useful in the treatment of some forms of myeloid leukemia.