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Fanconi anemia is a rare autosomal recessive disorder characterized clinically by congenital abnormalities, progressive bone marrow failure, and a predisposition to malignancy. FA cells are sensitive to DNA cross-linking agents. Complementation analysis of FA cells using somatic cell fusion has facilitated the identification of eight complementation groups, suggesting that FA is a genetically heterogeneous disorder. Six genes (FANCA, FANCC, FANCD2, FANCE, FANGF, FANCG) have been cloned so far. The majority of affected patients belong to FA group A. Of the 32 unrelated Israeli patients with FA that we studied, 6 carried the FANCC mutations and 15 the FANCA mutations. Among the Jewish patients, ethnic-related mutations were common. Recent cumulative evidence suggests that the FA proteins are repair proteins. FANCC, FANCA and FANCG bind and interact in a protein complex found in the cytoplasm and nucleus of normal cells. FANCD2 exists in two isoforms; the long active form, FANCD2-L, is absent from FA cells of all complementation groups. FANCD2 colocalizes with BRCA1 in nuclear foci, probably as part of a large genomic surveillance complex. Studies using FANCA and FANCC knockout mice suggest that bone marrow precursors express interferon-gamma hypersensitivity and show progressive apoptosis. The definition of the molecular basis of FA in many affected families now enables prenatal diagnosis.