The murine myelomonocytic cell line WEHI‐3B exhibits ectopic expression of the genes encoding the homeobox protein, Hox‐2.4, and the myeloid growth factor, interleukin‐3 (IL‐3). We showed previously that concomitant expression of IL‐3 and Hox‐2.4 in bone marrow cells induced the development of transplantable growth factor‐independent tumours resembling the WEHI‐3B tumour. We have now investigated the effect of enforced expression of Hox‐2.4 alone. Bone marrow cells were infected with Hox‐2.4 retrovirus and then either cultured in agar or transplanted into irradiated mice. In vitro, colonies derived from virus‐infected cells readily yielded IL‐3‐dependent, non‐tumorigenic cell lines of the myelomonocytic, megakaryocytic and mast cell lineages. Surprisingly, both the establishment and maintenance of these lines required very high concentrations of IL‐3 and reduced levels promoted differentiation. Transplanted mice analysed after 3 months appeared normal but their spleen and bone marrow contained abundant provirus‐bearing progenitor cells, from which IL‐3‐dependent long‐term cell lines could readily be established in vitro. Four of 18 animals monitored for up to 12 months eventually developed clonal leukaemia, associated in three cases with IL‐3 production. Thus ectopic expression of Hox‐2.4 enhances self‐renewal of immature myeloid progenitors and progression to a fully malignant state is favoured by somatic mutations conferring autocrine production of IL‐3.