Progress in unraveling the biology of myeloma has suffered from lack of an in vitro or in vivo system for reproducible growth of myeloma cells and development of disease manifestations. The SCID-hu mouse harbors a human microenvironment in the form of human fetal bone. Myeloma cells from the bone marrow of 80% of patients readily grew in the human environment of SCID-hu mice. Engraftment of myeloma cells was followed by detectable human Ig levels in the murine blood. Myeloma-bearing mice had high levels of monotypic human Igs, high blood calcium levels, increased osteoclast activity, and severe resorption of the human bones. The human microenvironment was infiltrated with Epstein-Barr virus-negative monoclonal myeloma cells of the same clonality as the original myeloma cells. Active angiogenesis was apparent in areas of myeloma cell infiltration; the new endothelial cells were of human origin. We conclude that the SCID-hu mouse is a favorable host for studying the biology and therapy of myeloma and that a normal bone marrow environment can support the growth of myeloma cells.