Final answer:
Leukemia is the condition characterized by an overgrowth of blood cells that become malignant and replace healthy bone marrow cells, leading to impaired blood functions.
Step-by-step explanation:
The condition called when there is an overgrowth (proliferation) of blood cells and these malignant cells replace healthy bone marrow cells is Leukemia. Leukemia is a type of cancer that affects blood cells, often starting in the bone marrow where these cells are produced. It results in the production of abnormal blood cells, most commonly white blood cells, and may involve different types of leukocytes depending on whether it is myelocytic or lymphocytic leukemia. The abnormal cells can lead to various symptoms and may require treatment options like chemotherapy, radiation, or bone marrow transplants.