The term myelodysplasia (MDS) refers to a group of bone marrow failure syndromes which are relatively rare in childhood. The pathogenesis of MDS is unknown, but a variety of chromosomal, molecular, and cytochemical abnormalities have been reported. We describe a 4-month-old female with MDS who presented with severe neutropenia and refractory anemia with excess blasts (RAEB). Bone marrow progenitor cell assays showed decreased erythroid and myeloid colony formation as compared to normal marrow, and the patient's serum further diminished colony formation of both her own and control marrow. These observations suggested the presence of a soluble factor inhibitory to hematopoiesis. Reverse transcriptase-polymerase chain reaction (RT-PCR) analysis of total RNA derived from the patient's bone marrow mononuclear cells revealed highly elevated tumor necrosis factor-alpha (TNF-alpha) mRNA levels. Using a similar RT-PCR profile, TNF-alpha mRNA levels were found to be elevated in two other children with myelodysplasia. We conclude that TNF-alpha is produced in large amounts by bone marrow mononuclear cells of children with MDS, and we hypothesize that TNF-alpha plays an important role in the pathophysiology of the ineffective hematopoiesis observed in MDS.