The v-Abl protein tyrosine kinase encoded by Abelson murine leukemia virus (Ab-MLV) induces transformation of pre-B cells in vivo and in vitro and can transform immortalized fibroblast cell lines in vitro. Although the kinase activity of the protein is required for these events, most previously studied mutants encoding truncated v-Abl proteins that lack the extreme carboxyl terminus retain high transforming capacity in NIH 3T3 cells but transform lymphocytes poorly. To understand the mechanisms responsible for poor lymphoid transformation, mutants expressing a v-Abl protein lacking portions of the COOH terminus were compared for their ability to transform pre-B cells. Although all mutants lacking sequences within the COOH terminus were compromised for lymphoid transformation, loss of amino acids in the central region of the COOH terminus, including those implicated in JAK interaction and DNA binding, decreased transformation twofold or less. In contrast, loss of the extreme COOH terminus rendered the protein unstable and led to rapid proteosome-mediated degradation, a feature that was more prominent when the protein was expressed in Ab-MLV-transformed lymphoid cells. These data indicate that the central portion of the COOH terminus is not essential for lymphoid transformation and reveal that one important function of the COOH terminus is to stabilize the v-Abl protein in lymphoid cells.