We show the molecular and functional characterization of a novel population of lineage-negative CD34-negative (Lin⁻CD34⁻) hematopoietic stem cells from chronic myelogenous leukemia (CML) patients at diagnosis. Molecular karyotyping and quantitative analysis of BCR-ABL transcript demonstrated that approximately one-third of CD34⁻ cells are leukemic. CML Lin⁻CD34⁻ cells showed kinetic quiescence and limited clonogenic capacity. However, stroma-dependent cultures induced CD34 expression on some cells and cell cycling, and increased clonogenic activity and expression of BCR-ABL transcript. Lin⁻CD34⁻ cells showed hematopoietic cell engraftment rate in 2 immunodeficient mouse strains similar to Lin-CD34⁺ cells, whereas endothelial cell engraftment was significantly higher. Gene expression profiling revealed the down-regulation of cell-cycle arrest genes and genes involved in antigen presentation and processing, while the expression of genes related to tumor progression, such as angiogenic factors, was strongly up-regulated compared with normal counterparts. Phenotypic analysis confirmed the significant down-regulation of HLA class I and II molecules in CML Lin⁻CD34⁻ cells. Imatinib mesylate did not reduce fusion transcript levels, BCR-ABL kinase activity, and clonogenic efficiency of CML Lin⁻CD34⁻ cells in vitro. Moreover, leukemic CD34⁻ cells survived exposure to BCR-ABL inhibitors in vivo. Thus, we identified a novel CD34⁻ leukemic stem cell subset in CML with peculiar molecular and functional characteristics.