The arotinoid Ro 40-8757 is a novel compound that has significant therapeutic activity against chemically induced breast tumors in rats. The results of combination therapy with cyclophosphamide, plus the arotinoid showed that the anti-tumor effects were additive. However, all of the rats given CPA alone died between week 6 and week 10 of treatment. None of the animals in the group treated with the combination died. Administration of a single dose of Ro 40-8757 to non-tumor bearing mice resulted in a transient increase in bone-marrow-progenitor cells after 2 days and a decrease in splenic progenitors at day 4. Treatment of mice with the combination demonstrated that the marrow progenitors were protected from the toxic effects of CPA by the arotinoid. Direct addition of Ro 40-8757 to mouse bone-marrow cells in clonogenic assay cultures containing WEHI-3-conditioned medium plus erythropoietin showed no significant enhancement by the arotinoid. The results suggest that this compound may exert its protective effect through the hemopoietic micro-environment.