Using serial examination and oral cytology, 50 adult patients undergoing induction therapy for acute leukemia were studied for oral colonization with candida species. Ninety percent of patients were found to be colonized with Candida, with most of these colonizations present by day 14. The 30 patients exhibiting colonization with pseudohyphae received ketoconazole 400 mg daily by mouth. Of 20 patients in this group treated for 5 or more days, Candida organisms were eradicated in nine. Sixteen patients from the above group with persistent colonization on ketoconazole were treated by independent clinical decision for sustained fever and neutropenia with Amphotericin B, but only one responded by elimination of colonization. Seven of the 15 patients who did not initially receive ketoconazole developed Candida dissemination in contrast to two of 30 who received ketoconazole initially (P = 0.003, Fisher's exact test). No patient who initially had or acquired a negative cytology developed oral or disseminated candidiasis. Clinical oral candidiasis occurred in three patients, all of whom were receiving amphotericin B. Approximately 90% of these patients have or develop oral colonization with Candida organisms as identified by oral cytology. Those with colonization, both with and without pseudohyphae present, are at risk for dissemination. Amphotericin B does not eliminate colonization remaining after treatment with 400 mg of ketoconazole daily. More effective diagnostic and therapeutic strategies are needed to identify and eliminate Candida organisms and to prevent disseminated candidiasis in this population of patients.