The mechanism that leads to hemopoietic failure in patients with myelodysplastic syndrome (MDS) is not well understood. There is evidence, however, that regulatory molecules such as tumor necrosis factor (TNF)-α, Fas (CD95), and Fas-ligand, which negatively affect hemopoiesis by way of apoptosis are upregulated. Here we analyzed marrow samples from 80 patients with MDS in regard to TNF-α and Fas-ligand levels and a possible correlation with various disease parameters and risk factors. TNF-α levels were elevated in comparison to samples from normal marrow donors, however, no significant correlation with FAB subtype, cytogenetic risk group or score by the International Prognostic Scoring System (IPSS) was observed. However, there was an inverse correlation between the cytogenetic risk category (low, intermediate, high) and levels of soluble Fas-ligand. The major source of TNF-α were mononuclear (non-stromal) cells which appeared to produce TNF-α at maximum levels. Limiting dilution analysis of CD34+ precursor cells showed that individually assayed cells, removed from companion cells that presumably provided negative signals such as TNF-α or Fas-ligand, were able to generate progressively increasing numbers of colonies. Stromal layers derived from MDS marrow did not have an inhibitory effect. In fact, higher colony numbers were obtained from both normal and MDS marrow derived hemopoietic precursors propagated on irradiated stromal layers from MDS marrow than on stromal layers from normal marrow. These results show that substantial numbers of normal hemopoietic precursors persist in MDS marrow. However, differentiation into mature cells is inhibited by negative signals originating from accessory or abnormal hemopoietic precursors in the non-adherent marrow fraction.