Src-homology region 2 (SH2) domains, by binding to tyrosine- phosphorylated sequences, mediate specific protein-protein interactions important in diverse signal transduction pathways. Previous studies have shown that activated forms of the Abl tyrosine kinase, including P210BCR/ABL of human chronic myelogenous leukemia, require the SH2 domain for the transformation of fibroblasts. To determine whether SH2 is also required for Bcr/Abl to transform hematopoietic cells, we have studied two SH2 domain mutations in P210BCR/ABL: a point mutation in the conserved FLVRES motif (P210/R1033K), which interferes with phosphotyrosine-binding by SH2, and a complete deletion of SH2 (P210/delta SH2). Despite a negative effect on intrinsic Abl kinase activity, both P210 SH2 mutants were still able to transform the hematopoietic factor-dependent cell lines Ba/F3 and FDC-P1 to growth factor independence. Unexpectedly, both mutants showed greater transforming activity than wild-type P210 in a quantitative transformation assay, probably as a consequence of increased stability of the SH2 mutant proteins in vivo. Cells transformed by both P210 SH2 mutants were leukemogenic in synaptic mice and P210/r1053K mice exhibited a distinct disease phenotype, reminiscent of that induced by v-Abl. These results demonstrate that while the Abl SH2 domain is essential for BCR/ABL transformation of fibroblasts, it is dispensable for the transformation of hematopoietic factor-dependent cell lines.