Hematopoiesis in health and disease results from complex interactions between primitive hematopoietic stem cells (HSCs) and the extrinsic influences of other cells in the bone marrow (BM) niche. Advances in stem cell biology, molecular genetics, and computational biology reveal that the immortality, self-renewal, and maintenance of blood homeostasis generally attributed to individual HSCs are functions of the cells' behavior in the normal BM environment. Here we discuss how these advances, together with results of outcomes-based clinical epidemiology studies, provide new insight into the importance of epigenetic events in leukemogenesis. For the chemical benzene (Bz), development of myeloid neoplasms depends predominantly on alterations within the microenvironments in which they arise. The primary persistent disease in Bz myelotoxicity is myelodysplastic syndrome, which precedes cytogenetic injury. Evidence indicates that acute myeloid leukemia arises as a secondary event, subsequent to evolution of the leukemia-initiating cell phenotype within the altered BM microenvironment. Further explorations into the nature of chemical versus de novo disease should consider this mechanism, which is biologically distinct from previous models of clonal cytogenetic injury. Understanding alterations of homeostatic regulation in the BM niche is important for validation of models of leukemogenesis, monitoring at-risk populations, and development of novel treatment and prevention strategies.