Notch is a highly conserved transmembrane protein that is involved in cell fate decisions and is found in organisms ranging from Drosophila to humans. A human homologue of Notch, TAN1, was initially identified at the chromosomal breakpoint of a subset of T-cell lymphoblastic leukemias/lymphomas containing a t(7;9) chromosomal translocation; however, its role in oncogenesis has been unclear. Using a bone marrow reconstitution assay with cells containing retrovirally transduced TAN1 alleles, we analyzed the oncogenic potential of both nuclear and extranuclear forms of truncated TAN1 in hematopoietic cells. Although the Moloney leukemia virus long terminal repeat drives expression in most hematopoietic cell types, retroviruses encoding either form of the TAN1 protein induced clonal leukemias of exclusively immature T cell phenotypes in approximately 50% of transplanted animals. All tumors overexpressed truncated TAN1 of the size and subcellular localization predicted from the structure of the gene. These results show that TAN1 is an oncoprotein and suggest that truncation and overexpression are important determinants of transforming activity. Moreover, the murine tumors caused by TAN1 in the bone marrow transplant model are very similar to the TAN1-associated human tumors and suggest that TAN1 may be specifically oncotropic for T cells.