The TEL-AML1 gene fusion results from a karyotypically cryptic t(12;21) translocation, the most common genetic abnormality in pediatric acute lymphoblastic leukemia (ALL). The presence of the TEL-AML1 fusion in utero, its protracted latency to overt leukemia, and secondary loss of the untranslocated TEL suggest it is an initiating event. Sequences of the TEL-AML1 genomic breakpoint and the immunoglobulin heavy chain (IgH) and/or T-cell receptor (TCR) gene rearrangements were characterized in four pediatric pre-B ALL patients. Analysis of these markers in relapsed patients revealed that immunophenotypically and cytogenetically distinct, and clonally unrelated antigen receptor leukemic cell populations harbored the same initiating TEL-AML1 molecular abnormality. Furthermore, TEL-AML1-positive cells persisted during remission even in the absence of detectable clone-specific IgH and TCR markers. We demonstrate that the TEL-AML1 translocation can occur in vivo during B-cell development before rearrangement of the IgH and TCR genes. We propose, in some cases, that the TEL-AML1 translocation occurs in a stem or B progenitor cell, and that recurrent TEL-AML1-positive pre-B ALL represents a de novo-transformed population that retains the same diagnostic initiating event.