To evaluate diagnostic criteria, disease characteristics, and the clinical course of pediatric myelodysplastic syndrome (MDS), we reviewed 327 consecutive cases diagnosed with de novo acute myeloid leukemia (AML) or MDS at St Jude Children's Research Hospital between February 1980 and January 1993. Among 49 cases with <30% marrow blasts (consistent with FAB criteria and common diagnostic practice for MDS), eight had karyotypes associated with de novo AML (four with t(8;21)(q22;q22) and one each with inv(16)(p13q22), t(11;17)(q23;q21), t(9;11)(p22;q13), and i(1)(ql0)). We termed these cases AML with a low blast count (AML-LBC) and compared their clinical and morphologic features with those of the remaining 41 cases. AML-LBC cases had little or no hematopoietic dysplasia. MDS cases consisted of refractory anemia (RA, n=6), RA with ring sideroblasts (n=2), RA with excess blasts (RAEB, n=4), RAEB in transformation (n=14), and chronic myelomonocytic leukemia (n=15). Most had moderate/severe or multilineage hematopoietic dysplasia, with significantly higher dysplasia scores than AML-LBC cases (P=0.007). Only 30% of patients with MDS achieved complete remission (CR) after two cycles of AML-directed therapy, compared with 88% of patients with AML-LBC (P=0.0001); MDS patients tended to experience prolonged severe cytopenias with chemotherapy. The 4-year survival for MDS patients was 23% +/- 7% (s.e.), vs 50% +/- 18% (s.e.) for AML-LBC (P=0.048). AML-LBC patients frequently had chloromas; none were seen in MDS patients. We conclude that the 30% blast threshold is ineffective for separation of AML and MDS in pediatric patients, and that genetic data should be included in this decision process. AML-LBC, defined by <30% blasts in bone marrow and cyto- (or molecular) genetic abnormalities associated with de novo AML, and characterized by absent or mild marrow dysplasia, is biologically and clinically distinct from MDS and should be treated as de novo AML. Outcome in pediatric MDS remains poor, and new treatment strategies are needed for these patients.