The multidrug resistance (MDR1) gene product P-glycoprotein is a membrane bound protein that functions as an ATP-dependent efflux pump, transporting exogenous and endogenous substrates from the cells. Since it plays an important role in chemotherapy, there is an increasing interest in the possible significance of genetic variation in MDR1. Our main objective was to study the MDR1gene polymorphism at C3435T with reference to development and progression of acute leukemia. The present study included 290 acute leukemia cases, comprising of 147 acute lymphocytic leukemia (ALL), 143 acute myeloid leukemia and 249 age-sex matched control samples for the analysis of MDR1 C3435T polymorphism, by the PCR-RFLP method. The MDR1 genotype distribution revealed an elevated frequency of the TT genotype in ALL cases (51.7%) as compared to controls (28.9%), whereas AML group did not show any association. The mean white blood cell count, blast% and LDH levels were increased in ALL patients with the CC genotype. No deviation was observed with respect to haemoglobin, platelet count and disease free survival in ALL patients. The association of CC genotype with clinical variables in ALL indicated that the CC genotype with high expression might be eliminating antileukemic drugs (anthracyclines, Daunorubicin, Vincristeine, Mitoxanthrone) which are P-gp substrates, leading to lower intra cellular drug concentrations and a poor prognosis. Such an association with the CC genotype was not observed in AML. In conclusion, these results suggested that the MDR1 TT genotype might influence risk of development of acute lympoblastic leukemia and the CC genotype might be linked to a poor prognosis of ALL.