A case of phagocytic, lambda light chain, plasma cell myeloma was characterized by its clinical, morphologic, cytochemical, immunologic, and cell kinetic features. A 40-year-old man presented with Coombs-negative hemolytic anemia, hepatosplenomegaly, lytic bone lesions, lambda light chain monoclonal gammopathy, and infiltration of the bone marrow by dysplastic plasma cells, 10% of which demonstrated phagocytosis of erythroid cells. Electron microscopy demonstrated myeloma cells with prominent cytoplasmic microfilaments and erythroid cells in intracytoplasmic vacuoles. The myeloma cells did not phagocytose staphylococci in vitro. Phagocytic and nonphagocytic myeloma cells were tartrate-sensitive, acid-phosphatase positive, alpha-napthyl butyrate esterase negative, and did not form E rosettes or EAox(IgG) rosettes. The tumor cells were Tdt, Ia antigen, and SIg negative. Immunofluorescent staining for cytoplasmic light chains showed a monoclonal lambda pattern in nonphagocytic myeloma cells, and a probable monoclonal lambda pattern in phagocytic myeloma cells. These findings characterize the neoplasm as a monoclonal proliferation of differentiated plasma cells with the capability of erythrophagocytosis. Erythrophagocytosis by myeloma cells may have been responsible for the hemolytic anemia. The tritiated thymidine labeling index (LI%) was high (8%), suggesting a poor prognosis, despite a dramatic initial response to chemotherapy.