CD13/aminopeptidase N (APN) is a cell surface metallopeptidase expressed by normal and leukemic myeloid cells, and by lymphoblasts in 5-10% of acute lymphoid leukemia (ALL) cases, previously classified as 'biphenotypic' or 'mixed-lineage' leukemias. In fresh cells from two early B-lineage, t(9;22)-positive, ALL cases that were CD13/APN-negative at diagnosis, high levels of CD13/APN expression were induced after 3 days of in vitro culture. Similarly, continuously growing cell lines established from these ALLs, KOPN-30bi and KOPN-57bi, expressed CD13/APN, but retained other phenotypic, cytochemical and molecular features of early B-lineage cells. After 7 days of culture on human bone marrow stromal layers or murine S17 stromal cells, levels of CD13/APN expression by the leukemic cell lines decreased by more than 4-fold. After 21 days of culture on stromal cells, CD13/APN became undetectable by flow cytometry; however, the original levels of expression were regained when the cell lines were cultured without stroma. A more moderate decrease in CD13/APN expression was also observed in the myeloid lines KG-1 and HL-60 during culture on stroma. Suppression of CD13/APN expression required contact with stroma, but did not depend on VLA-4-mediated adhesion. Surprisingly, the mechanism through which stromal cells down-regulated CD13/APN expression in leukemic cells involved suppression of transcription from the CD13/APN gene. Contact with stroma resulted in a 2-3-fold decrease in CD13/APN mRNA expression and near ablation of CD13/APN gene transcription in nuclear run-on assays. Thus, CD13/APN expression by leukemic cells is regulated by interactions with the bone marrow microenvironment. CD13/APN expression in some ALL at diagnosis could result from a block in the signal transduction pathways that cause its suppression by bone marrow stromal cells.