Chronic lymphocytic leukemia (CLL) represents 30% of adult leukemia. TCL1 is expressed in ~ 90% of human CLL. Transgenic expression of TCL1 in murine B cells (Eμ-TCL1) results in mouse CLL. Here we show for the first time that the previously unexplored endoplasmic reticulum (ER) stress response is aberrantly activated in Eμ-TCL1 mouse and human CLL. This includes activation of the IRE-1/XBP-1 pathway and the transcriptionally up-regulated expression of Derlin-1, Derlin-2, BiP, GRP94, and PDI. TCL1 associates with the XBP-1 transcription factor, and causes the dysregulated expression of the transcription factors, Pax5, IRF4, and Blimp-1, and of the activation-induced cytidine deaminase. In addition, TCL1-overexpressing CLL cells manufacture a distinctly different BCR, as we detected increased expression of membrane-bound IgM and altered N-linked glycosylation of Igα and Igβ, which account for the hyperactive BCR in malignant CLL. To demonstrate that the ER stress-response pathway is a novel molecular target for the treatment of CLL, we blocked the IRE-1/XBP-1 pathway using a novel inhibitor, and observed apoptosis and significantly stalled growth of CLL cells in vitro and in mice. These studies reveal an important role of TCL1 in activating the ER stress response in support for malignant progression of CLL.