Imatinib has impressive activity against chronic myeloid leukaemia (CML), but does not appear to completely eradicate the disease. Although responses to interferon-alpha (IFN) are slower and less dramatic than those to imatinib, they can be durable even after discontinuation of the drug. Unlike imatinib, the specific mechanisms responsible for IFN's clinical activity in CML are unknown. We found that IFN induced a G1 cell cycle arrest, as well as terminal differentiation, of the CML cell line KT-1 and CML CD34+ cells from clinical specimens. Myeloid growth factors augmented the antileukaemic activity of IFN, and neutralising antibodies directed against myeloid growth factors inhibited IFN's antileukaemic activity. We next directly compared the effects of imatinib and IFN against differentiated and primitive CML progenitors from newly-diagnosed patients. Although less active against CML granulocyte-macrophage colony forming units than imatinib, IFN was significantly more toxic to primitive CML progenitors responsible for the maintenance of long-term cultures. Imatinib and IFN appear to have divergent effects on CML progenitors at different stages of maturation, with imatinib more active against differentiated CML progenitors and IFN more active against primitive CML progenitors. The different target cells for these agents may explain the disparities in the kinetics and durability of their clinical responses. At least part of the clinical effect of IFN in CML appears to result from its ability to differentiate primitive CML progenitors.