In the past decade, we have studied four unrelated children with what we believe is a previously unreported disorder affecting the bone marrow and exocrine pancreas. During infancy these patients had the onset of severe, transfusion-dependent, macrocytic anemia plus a variable degree of neutropenia and thrombocytopenia. Their bone marrows had normal cellularity but were characterized by remarkable vacuolization of erythroid and myeloid precursors, hemosiderosis, and ringed sideroblasts. The vacuoles probably represented manifestations of cellular degeneration and death. In two patients, in vitro bone marrow cultures showed abnormal erythroid and myeloid progenitor cell growth and, in one child, abnormal vacuolated erythroid colonies. Family histories were unrevealing, parents were hematologically normal, and both sexes were involved. There was no evidence of specific nutritional deficiencies or exposure to agents associated with marrow vacuolization. A number of therapeutic interventions produced no effect. One child had clinical malabsorption. This child and one other had extensive pancreatic fibrosis at autopsy. The other two patients had findings indicating exocrine pancreatic dysfunction. Two children had splenic atrophy. This new syndrome, with associated bone marrow and exocrine pancreatic dysfunctions, differs in several respects from the syndrome of pancreatic liposis and neutropenia described by Shwachman et all and Bodian et al, and from other conditions with vacuolization of the marrow or sideroblastosis.