Approximately 10% of the neonates with Down syndrome (DS) exhibit a unique transient leukemia (TL). Though TL resolves spontaneously in most patients, early death and development of myeloid leukemia (ML-DS) may occur. Prognostic factors as well as treatment indication are currently uncertain. To resolve that issue, we prospectively collected clinical, biologic, and treatment data of 146 patients with TL. The 5-year overall survival (OS) and event-free survival (EFS) were 85% plus or minus 3% and 63% plus or minus 4%, respectively. Multivariate analysis revealed a correlation between high white blood cell (WBC) count, ascites, preterm delivery, bleeding diatheses, failure of spontaneous remission, and the occurrence of early death. Treatment with cytarabine (0.5-1.5 mg/kg) was administered to 28 patients with high WBC count, thrombocytopenia, or liver dysfunction. The therapy had a beneficial effect on the outcome of those children with risk factors for early death (5-year EFS, 52% ± 12% vs 28% ± 11% [no treatment]; P = .02). Multivariate analysis demonstrated its favorable prognostic impact. A total of 29 (23%) patients with TL subsequently developed ML-DS. Patients with ML-DS with a history of TL had a significantly better 5-year EFS (91% ± 5%) than those without documented TL (70% ± 4%), primarily due to a lower relapse rate. A history of TL may therefore define a lower-risk ML-DS subgroup. This study was registered at www.clinicaltrials.gov as no. NCT 00111345.