Meaningful progress has been made toward clarifying the molecular steps in the pathogenesis of acute myeloid leukemia (AML). Chromosome studies have established that translocations/inversions are the most common cytogenetic defects in AML. Cloning of chromosome breakpoints has shown that genes involved in the chromosome abnormalities are transcription factors, functional loss of which alters chromatin configuration and results in the disruption of myeloid differentiation. However, transgenic animal models have demonstrated that AML-specific translocations/inversions alone are insufficient to cause overt leukemia, which occurs only when point mutations affecting receptor tyrosine kinases (RTKs) develop. Therefore, development of AML is now considered a two-step process in which RTK mutations provide a proliferative and a survival advantage to a clonal cell population already marked by impaired differentiation. In addition, more accurate definition of such genetic lesions has led to a more precise insight as to how such lesions interact with cellular signaling pathways that are aberrantly regulated in AML. All these new data have profound clinical and therapeutic implications and will surely translate into the development of molecules that target specific mutations or signal transduction pathways.