Acute myeloid leukemia (AML) is the most common childhood malignancy. AML has therapeutically been difficult to treat. In 2001, the World Health Organization (WHO), in conjunction with the Society for Hematopathology and the European Association of Hematopathology, published a new classification for myeloid neoplasms. A number of chromosomal abnormalities are used to predict outcome and stratify therapeutic risk groups in children with AML. Recently, alterations in receptor tyrosine kinases, tyrosine phosphatases and in oncogenes such as RAS have been implicated in the pathogenesis of AML. This article aims to review the recent development in diagnosis, treatment and monitoring of AML. Better understanding of the molecular pathogenesis of AML has led to the development of target-specific therapies. Some of the new classes of drugs include monoclonal antibody directed against the CD33 antigen, farnesyltransferase inhibitors (FTI), and FMSlike tyrosine kinase 3 (FLT3) inhibitors. The role of allogenic SCT, particularly whether it should be done during first CR or reserved for second remission, remains the most controversial issue in pediatric AML. There is a need of collaboration with international pediatric cooperative oncology groups and definitive clinical trials in order to establish use of these newer molecules in pediatric populations.