Myeloid leukemias have been shown to secrete as well as respond to cytokines such as interleukin-3 (IL-3) with an increased growth rate and may therefore become self-stimulatory through an external autocrine mechanism. In vitro evidence that IL-3 is functional within the intracellular compartment has been obtained through modification of the murine IL-3 gene to encode for the amino acids SEKDEL on the carboxyl terminus of the protein, resulting in preferential intracellular retention. The ability of bone marrow-derived hematopoietic progenitor cells to increase their proliferative capacity through intracellular mechanisms was investigated in vivo using retroviruses containing the wild-type or SEKDEL-modified IL-3 gene, transcriptionally regulated by the retroviral long terminal repeat (LTR) or by the SV40 early promoter, in lethally irradiated, bone marrow-reconstituted mice. Bone marrow cells exposed to the N2KDEL virus containing the SEKDEL-modified IL-3 gene were shown by bioassay to retain large amounts of IL-3 intracellularly, and the presence of an integrated provirus containing the SEKDEL sequences was demonstrated by polymerase chain reaction (PCR) in the spleen and bone marrow of these animals. Transduction with all four types of IL-3 viruses resulted in dramatic increases in the circulating white blood cell (WBC) count; this myeloproliferative state occurred within several weeks following bone marrow transplantation (BMT), when viruses expressing the IL-3 or modified gene were under transcriptional regulation of the viral LTR, and approximately 2 months post-BMT, when they were under control of the SV40 internal promoter. Serum levels of IL-3 were measured in transplanted animals and found to be markedly increased in each case in which WBC elevation was observed, including mice receiving marrow transduced with constructs containing the IL-3 gene modified for intracellular retention. No animals were observed in which myeloproliferation occurred without secretion. From these experiments, it seems unlikely that exclusively intracellular mechanisms are a major contributor to the development of the myeloproliferative syndrome observed in these animals.