This study evaluated the utility of the immunoperoxidase method as applied to bone marrow sections in the diagnosis of patients with monoclonal gammopathies. Intracellular immunoglobulin light chains were identified in fixed, decalcified bone marrow biopsy sections from 66 patients with monoclonal proteins, using an avidin-biotin-peroxidase complex immunoperoxidase method. In all cases the predominant light chain identified in the bone marrrow biopsy correlated with the monoclonal light chain identified in the serum. In addition, a light chain ratio was defined that correlated with the clinical diagnoses. The light chain ratios were highest in patients with multiple myeloma and were significantly different from those with monoclonal gammopathy of undetermined significance. There was no correlation between level of serum monoclonal protein and light chain ratios. The ratios were also high in patients with macroglobulinemia, primary amyloidosis, and renal disease secondary to monoclonal proteins but without overt myeloma. Determination of light chain ratios differentiated patients with multiple myeloma from those with monoclonal gammopathy of undetermined significance and helped identify patients with end organ damage secondary to monoclonal proteins but without overt myeloma.