We have previously reported that the Jak2 tyrosine kinase but not Jak1 is tyrosine phosphorylated in the absence of IL-3 in Bcr–Abl positive M3. 16 cells, which are rendered IL-3 independent by BCR–ABL gene expression. We have explored the involvement of Jak2 tyrosine phosphorylation in Bcr-Abl oncogenic effects. Our results indicate that Jak2 became tyrosine-phosphorylated in a number of cell lines expressing Bcr–Abl, when maintained in medium lacking IL-3, whereas Bcr–Abl negative cells lacked Jak2 tyrosine phosphorylation. Jak2 was poorly tyrosine-phosphorylated in cells expressing the SH2 deletion mutant of Bcr–Abl compared to either wild-type Bcr–Abl or its SH3 deletion mutant. Moreover, tyrosine phosphorylation of Jak2 by Bcr–Abl was inhibited by the Abl tyrosine kinase inhibitor, STI 571, in a dose-dependent manner. This inhibition of Bcr–Abl kinase by the drug did not interfere with the ability of Jak2 and Bcr–Abl to form a complex. Studies with deletion mutants of Bcr–Abl indicated that the C-terminal domain of Abl within Bcr–Abl was involved in complex formation with Jak2. Similarly, GST–Abl pull-down assays confirmed the strong binding to Jak2 by the C-terminus of Abl. Jak2 peptide substrate studies indicated that the Bcr–Abl and Abl tyrosine kinases specifically phosphorylated Y1007 of Jak2 but only poorly phosphorylated Y1008. Phosphorylation of Y1007 of Jak2 is known to be critical for its tyrosine kinase activation. Tyrosine residue 1007 of Jak2 was phosphorylated in 32Dp210 cells as measured by Western blotting with a phosphotyrosine 1007 sequence-specific antibody. A kinase-inactive Jak2 mutant blocked the colony forming ability of K562 cells. Tumor formation of K562 cells in nude mice was similarly inhibited by this kinase-inactive Jak2 mutant. This inhibition was independent of Stat5 tyrosine phosphorylation. Furthermore, tyrosine-phosphorylated Jak2 was detected in blood cells from CML patients in blast crisis but not in a normal marrow sample. In summary, these findings provide strong evidence that the Jak2 tyrosine kinase is a critical factor in Bcr–Abl malignant transformation.