CEM cells exhibiting a 25-fold (C25X) or 80-fold (C80X) increase in resistance to adriamycin were isolated and characterized. C25X cells were cross-resistant to daunomycin and etoposide (VP-16) but not to vincristine or colchicine. These cells were not defective in the cellular accumulation of drug and did not contain detectable levels of P-glycoprotein. Continued exposure of C25X cells to adriamycin resulted in increased levels of resistance and additional phenotypic changes. These cells (C80X) now contained high levels of P-glycoprotein and were cross-resistant to a variety of agents including vincristine and colchicine. A fluorometric assay for DNA unwinding was used to measure levels of drug-induced DNA breaks in sensitive and C25X resistant cells. Studies carried out with VP-16, 4'9-acridinyl-aminomethanesulfon-m-anisidide (m-AMSA), adriamycin, or daunomycin showed that the level of drug-induced DNA strand breakage in resistant cells was considerably less than that occurring in drug-treated sensitive cells. These studies, therefore, show that treatment of CEM cells with adriamycin resulted in a nuclear alteration that contributed to drug resistance. They also demonstrate that prolonged treatment of cells with adriamycin resulted in membrane alterations that affect cellular drug accumulation. Adriamycin resistance in CEM cells can thus occur as a result of at least two distinct mechanisms.