Chronic benign neutropenia of childhood is a heterogeneous disorder. This study describes two severely neutropenic children with a benign clinical course and the unique bone marrow finding of macrophage engulfment of band and segmented neutrophils. Phagocytic vacuoles in the majority of macrophages contained neutrophils in various stages of digestion at both the light and electron microscope level (with as many as four neutrophils observed in single macrophages). Ultrastructural studies demonstrated that the neutrophils were morphologically normal, and apparently viable at the time of phagocytosis. This type of neutrophil phagocytosis was not observed in five other consecutively studied children with CBN. All of these children with CBN had ultrastructurally normal neutrophils, lacked demonstrable antineutrophil antibodies or serum inhibitors to in vitro myelopoiesis, and had normal colony-forming cells and colony-stimulating activity in vitro. Thus despite many similar clinical and laboratory features in children with CBN, only a unique subgroup of these patients demonstrates abnormal neutrophil-macrophage interaction.