The effect of free and DNA-linked daunorubicin on the colony-forming ability of granulocyte-macrophage committed stem cells and spleen colony-forming cells (i.e., multipotent stem cells) from normal mice has been studied in vitro and in vivo. After incubation of bone marrow cells in short-term suspension cultures, both committed and multipotent stem cells were more sensitive to the free drug than to the DNA complex, whereas the reverse was found in vivo after i.v. injection. However, when the in vitro cell-killing effect was related to the cellular retention of daunorubicin, no difference in activity was found between free and DNA-linked drug. Incubation of the bone marrow cells with a higher drug concentration for a shorter time resulted in a considerably lower cell survival than incubation with a lower concentration for a longer time, the intracellular exposure dose being the same. When the in vivo cell survival was related to the cellular retention of daunorubicin, the DNA complex was slightly more toxic than free drug, which can be explained by the higher peak concentration obtained. The results obtained with committed granulocytic stem cells and multipotent stem cells were comparable. Thus, the observed discrepancy between the in vitro and in vivo toxicity of free and DNA-linked daunorubicin can be explained by the differences in cellular retention of daunorubicin under these two conditions; i.e., the DNA complex probably acts as a slow-release preparation of daunorubicin. The results also demonstrated for the first time the importance of the peak concentration of daunorubicin in the target cells and indicate an important role of dose scheduling for the cytostatic effect of the drug.