Although physicians have known for many decades that children with Down syndrome are predisposed to developing transient myeloproliferative disorder (TMD) and acute megakaryoblastic leukemia (AMKL), many questions regarding these disorders remain unresolved. First, what is the relationship between TMD and AMKL? Second, what specific genetic alterations contribute to the leukemic process? Finally, what factors lead to the increased predisposition to these myeloid disorders? In this review I will summarize important new insights into the biology of TMD and AMKL gained from the recent discovery that GATA1, a gene that encodes an essential hematopoietic transcription factor, is mutated in the leukemic blasts from nearly all patients with these malignancies. In addition, I will discuss whether assaying for the presence of a GATA1 mutation can aid in the diagnosis of these and related megakaryoblastic leukemias. Future research aimed at defining the activity of mutant GATA‐1 protein and identifying interacting factors encoded by chromosome 21 will likely lead to an even greater understanding of this intriguing leukemia. © 2004 Wiley‐Liss, Inc.