It has been suggested that the occurrence of abnormal localization of immature precursors (ALIP) in the bone marrow biopsy (BMB) may be of diagnostic and prognostic significance in myelodysplastic syndromes (MDS). The recognition of ALIP has been based exclusively on bone marrow histological appearances. During the last decade technical advances have led to the widespread use of various immunophenotypic markers for the diagnostic and prognostic purposes which has contributed enormously in understanding the development of haemopoietic cells and the cellular origin of various haematological malignancies. In addition proliferation antigens, growth factors, oncogenes, anti-oncogenes and other biological discoveries have opened new vistas to our knowledge of the normal and neoplastic growth processes. Despite this, the precise nature of ALIP and their significance in relation to the aetiopathogenesis and evolution of MDS remains unclear. Indeed the diagnostic value of ALIP in MDS is debatable. Furthermore, the precise cell lineages which comprise ALIP are not defined. The purpose of this review is to address these issues and to incorporate our new findings on the histological and immunophenotypic characterization of immature cell aggregates.