Individuals with neurofibromatosis type 1 (NF1) are predisposed to certain cancers including juvenile chronic myelogenous leukaemia (JCML). The NF1 tumour-suppressor gene encodes a protein (neurofibromin) that accelerates GTP hydrolysis on Ras proteins. Here we show that primary leukaemic cells from children with NF1 show a selective decrease in NF1-like GTPase activating protein (GAP) activity for Ras but retain normal cellular GAP activity. Leukaemic cells also show an elevated percentage of Ras in the GTP-bound conformation. JCML cells are hypersensitive to granulocyte-macrophage colony stimulating factor (GM-CSF), and we observed a similar pattern of aberrant growth in haematopoietic cells from Nf1-/- mouse embryos. These data define a specific role for neurofibromin in negatively regulating GM-CSF signaling through Ras in haematopoietic cells and they suggest that hypersensitivity to GM-CSF may be a primary event in the development of JCML.