We have studied a leukemic stem-cell line, DU.528, that is able to differentiate into myeloid and lymphoid cells. The leukemic cells have a translocation between chromosomes 1 and 14, t(1;14)(p33;q11), which we have molecularly cloned and sequenced. Initial screening used joining (J)-segment probes from the T-cell receptor (TCR) alpha- and delta-chain loci. In apparent concert with the translocation, a deletion has occurred between delta-chain diversity (D)-region genes D delta 1 and D delta 2. D delta 2 was observed on derivative chromosome 1 [der(1)] and D delta 1 on der(14) with a deletion of the intervening 10 kilobases of germ-line DNA. The nature of the D delta 1-D delta 2 deletional event implicates a lymphoid recombinase in the mechanism of the translocation. As a consequence of the translocation, an unusual fusion transcript was generated. Probes from chromosome 1 detected a previously unreported transcript in RNA from both the cell line and the patient. A chromosome 14 probe identified the same transcript, thus confirming a fusion transcript derived from both chromosomes 1 and 14. This translocation may identify a gene for which we propose the name SCL (stem-cell leukemia) that is important for hemopoietic development and oncogenesis and that has been disrupted or altered in this stem-cell line.