Cells from a clone of mouse myeloid leukemic cells that can be induced to differentiate in vitro to mature cells by the normal macrophage- and granulocyte-inducing protein, MGI-2, were injected into mouse embryos at 10 days gestation. The leukemic cells, derived from an SJL/J mouse, were microinjected into the placentae of C3HeB fetuses and the viable progeny were tested for chimerism by analysis of glucose phosphate isomerase isozymes. Fifty-five percent out of 201 viable progeny died prior to weaning due to tumors derived from the injected cells. Of the remaining 91 apparently healthy adult animals, 2 had chimeric populations. One mouse had a chimeric population of granulocytes and the other mouse a chimeric population of macrophages. The animal with a chimeric population of macrophages was chimeric at 1 and 2 months of age and had lost any detectable donor derived contribution by the age of 3 months. The chimeric granulocyte population in the other animal was still stable at 3 months. The myeloid leukemic cells injected into midgestation embryos thus participated in the development of two different cell types in apparently healthy adult animals. Our results indicate that malignant cells of more restricted developmental potential than teratocarcinoma cells may participate in normal development. It remains to be determined whether this participation in normal development was due to normal differentiation of the malignant cells, or the production of nonmalignant segregants derived from the malignant cells.