The immunomodulator AS101 has been found previously by us to stimulate the secretion of high levels of interleukin 1 and colony stimulating factor (CSF) in vitro, as well as the production of CSF in vivo in mice models. These cytokines are known to induce proliferation and differentiation of hematopoietic progenitor cells from the spleen and bone marrow (BM) and to protect mice from DNA-damaging agents. The present studies were designed to evaluate the effects of prolonged treatment with AS101 on myelopoiesis, BM cellularity, and CSF secretion in mice treated with a sublethal dose of cyclophosphamide (CYP) and on the survival of mice undergoing treatment with lethal doses of this compound. In this model, the hematopoietic progenitors were suppressed during the overbound phase of myelopoiesis resulting from the cytotoxic effects of CYP. This allowed the detection of a significant proliferative effect of AS101 in vivo on BM colony-forming units granulocyte-macrophage progenitor cells, BM cellularity, and the secretion of CSF. Moreover, AS101 protected these animals from the lethal effects of high doses of CYP. These protective effects were demonstrable only when AS101 was administered to mice prior to CYP treatment. The only exception was CSF secretion by spleen cells that had been reconstituted when AS101 was administered both prior to and following CYP treatment. AS101 was found to have a synergistic effect with CYP in the treatment of tumor-bearing mice, suggesting that the combination of these two modalities provides a more effective treatment of their tumors. These results strongly suggest an immunoregulatory role for AS101 in counteracting the chemotherapy-induced hematopoietic suppression as well as usefulness as adjunct treatment of cancer when used in combination with CYP.