Pre-B lymphoblastic leukemia cells carrying a BCR–ABL1 gene rearrangement exhibit an undifferentiated phenotype. Comparing the genome-wide gene expression profiles of normal B-cell subsets and BCR–ABL1+ pre-B lymphoblastic leukemia cells by SAGE, the leukemia cells show loss of B lymphoid identity and aberrant expression of myeloid lineage-specific molecules. Consistent with this, BCR–ABL1+ pre-B lymphoblastic leukemia cells exhibit defective expression of IKAROS, a transcription factor needed for early lymphoid lineage commitment. As shown by inducible expression of BCR–ABL1 in human and murine B-cell precursor cell lines, BCR–ABL1 induces the expression of a dominant-negative IKAROS splice variant, termed IK6. Comparing matched leukemia sample pairs from patients before and during therapy with the BCR–ABL1 kinase inhibitor STI571 (Imatinib), inhibition of BCR–ABL1 partially corrected aberrant expression of IK6 and lineage infidelity of the leukemia cells. To elucidate the contribution of IK6 to lineage infidelity in BCR–ABL1+ cell lines, IK6 expression was silenced by RNA interference. Upon inhibition of IK6, BCR–ABL1+ leukemia cells partially restored B lymphoid lineage commitment. Therefore, we propose that BCR–ABL1 induces aberrant splicing of IKAROS, which interferes with lineage identity and differentiation of pre-B lymphoblastic leukemia cells.