Rare, novel forms of activated ABL kinase, the result of a fusion between TEL (or ETV6, a member of the ETS transcription factor family), and the non-receptor tyrosine kinase ABL, have been identified. We have analysed the TEL/ABL fusion protein (type A) cloned from an acute lymphoblastic leukaemia patient. In contrast to a second TEL/ABL fusion (type B) identified in two cases of myeloid leukaemia, the portion of TEL contained in the type A TEL/ABL fusion was smaller and did not contain a potential Grb2 binding site. The type A TEL/ABL cDNA we used in this study encoded a 155 kD protein with elevated tyrosine kinase activity and was responsible for the phosphorylation of a number of proteins in vivo. Its expression in factor-dependent murine haemopoietic precursor cells efficiently converted these cells to factor independence for both survival and growth. These cells continued to express high levels of myc mRNA after growth factor depletion. We also demonstrated that type A TEL/ABL self-associated in stably expressing haemopoietic cells. Although the TEL portion of the TEL/ABL fusion protein has no sequence similarity to that of BCR in the BCR/ABL protein, all forms of these fusion proteins contain a structure implicated in oligomerization. Our results support the conclusion that the protein interaction domain of BCR and TEL, but not the Grb2 binding site, are the important functional components in the activation of ABL kinase in haemopoietic discase.