&NA;Acute myeloid leukemia (AML) with abnormal bone marrow eosinophils and inv(16)(p13;q22) or t(16;16)(p13; q22) is a distinct type of AML designated as M4Eo by the French‐American‐British (FAB) group. AML‐M4Eo is characterized by myelomonocytic differentiation accompanied by pathologic eosinophils containing abnormally large basophilic granules that are positive for myeloperoxidase, chloroacetate esterase, and periodic acid‐Schiff (PAS). Immunophenotypic studies have shown that AML‐M4Eo expresses myeloid markers and that some cases coexpress the T‐cell‐associated antigen CD2. Cytogenetic analysis of AML‐M4Eo reveals a pericentric inversion, inv(16)(p13;q22); or less commonly, the translocation t(16;16)(p13;q22). These molecular abnormalities result in the juxtaposition of theCBF&bgr; gene at 16q22 with theMYH11 gene at 16p13, creating a novelCBF&bgr;/MYH11 fusion gene that causes leukemogenesis and a loss of function of the core binding factor protein complex. The overall prognosis for patients with AML‐M4Eo is favorable. The recently proposed World Health Organization (WHO) classification of myeloid neoplasms recognizes AMLs with recurrent cytogenetic translocations as distinct clinicopathologic entities, one of which is AML‐M4Eo. The differential diagnosis of AML‐M4Eo is discussed.