Damage to DNA can be assessed using a technique for labeling nicks in DNA by incubating paraformaldehyde-fixed cells in a mixture of biotin-labeled dUTP, dATP with dNTP and DNA polymerase I. The addition of labeled nucleotides can then be identified by fluorescence by their reaction with streptavidin. We have used this method to examine damage to the DNA of OCI/AML-2 cells caused by cytosine arabinoside (ara-C) and the effects of hydrocortisone and retinoic acid on this damage (regulated drug sensitivity). Concurrent measurements of clonogenic cells were used to allow a comparison of damage as shown by labeled nicks in DNA with loss of colony-forming capacity. Both methods gave comparable ara-C dose-response curves, for cells incubated with the drug for 24 h. Both methods showed that exposure of OCI/AML-2 cells to hydrocortisone before ara-C greatly reduced the toxicity of the drug; and that retinoic acid given after ara-C increased both its lethal effects on colony formation and the extent of DNA damage as assessed by labeled nicks. Clonogenic assays required for colony formation are not readily adapted to the study of development and repair of damage. The labeled nick assay is suitable for such kinetic studies. OCI/AML-2 cells were exposed in suspension to either hydrocortisone before ara-C or retinoic acid after ara-C. At 24 h intervals thereafter, cells were harvested, assayed by both methods, and recultured after dilution to the original cell concentration. In cultures exposed only to ara-C (controls), the number of cells with labeled nicks increased during the first 24 h and cells with damaged DNA could be detected for 48-72 h, depending on the ara-C dose in spite of the dilution at each passage. OCI/AML-2 cells exposed to hydrocortisone before drug showed fewer nick-labeled cells than controls at the first observation and damaged cells rapidly disappeared from the population with increasing time. For cells treated with retinoic acid after ara-C, the nick-labeled cell population was greater than controls and remained greater throughout subsequent observations. We propose that in the control cultures, sublethal damage either became lethal with time and was seen as increased numbers of cells with damaged DNA, or alternatively, sublethal damage was repaired. From this point of view we consider that hydrocortisone promotes repair of sublethal damage while retinoic acid inhibits repair.