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Pseudo–Pelger-Huët anomaly (PPHA) has been documented in association with transplant medications and other drugs. This iatrogenic neutrophilic dysplasia is reversible with cessation or adjustment of medications but is frequently confused with myelodysplastic syndrome (MDS) based on the conventional concept that PPHA is a marker for dysplasia. We investigated the clinicopathologic features in iatrogenic PPHA and compared them with MDS-related PPHA. The 13 cases studied included 5 bone marrow/stem cell transplantations, 3 solid organ transplantations, 1 autoimmune disease, 3 chronic lymphocytic leukemias, and 1 breast carcinoma. For 12 cases, there was follow-up evaluation, and all demonstrated at least transient normalization of neutrophilic segmentation. All 9 cases of MDS demonstrated at least 2 of the following pathologic abnormalities on bone marrow biopsy: hypercellularity (8/9), morphologic dysplasia (8/9), clonal cytogenetic abnormality (7/9), and increased blasts (3/9), whereas these abnormalities were typically absent in iatrogenic PPHA. Iatrogenic PPHA displayed a higher proportion of circulating PPHA cells than in MDS (mean, 47.4%; SD, 31.6% vs mean, 12.3%; SD, 9.8; P < .01). A diagnostic algorithm is proposed in which isolated PPHA is indicative of transient or benign PPHA unless proven otherwise.