Shwachman's syndrome is a rare congenital disorder associated with neutropenia and exocrine pancreatic insufficiency. We describe the development of acute myeloid leukemia in a 38-year-old patient with Shwachman's syndrome following three years of pancytopenia. After chemotherapy the leukemic clone was eradicated, however, the patient's bone-marrow hypoplasia persisted beyond 180 days with neutropenia that responded to administration of granulocyte colony-stimulating factor. Despite the patient's low erythropoietin levels, administration of erythropoietin did not improve his hemoglobin. We review previously reported cases of leukemia complicating Shwachman's syndrome with emphasis on the persistent risk of complications in patients with congenital bone-marrow failure syndromes.