Here, we report that primary leukemic cells from infants with newly diagnosed B-precursor leukemia express a truncated and functionally defective CD22 coreceptor protein that is unable to transmit apoptotic signals because it lacks most of the intracellular domain, including the key regulatory signal transduction elements and all of the cytoplasmic tyrosine residues. Expression of this structurally and functionally abnormal CD22 protein is associated with a very aggressive in vivo growth of patients’ primary leukemia cells causing disseminated overt leukemia in SCID mice. The abnormal CD22 coreceptor is encoded by a profoundly aberrant mRNA arising from a splicing defect that causes the deletion of exon 12 (c.2208-c.2327) (CD22ΔE12) and results in a truncating frameshift mutation. The splicing defect is associated with multiple homozygous mutations within a 132-bp segment of the intronic sequence between exons 12 and 13. These mutations cause marked changes in the predicted secondary structures of the mutant CD22 pre-mRNA sequences that affect the target motifs for the splicing factors hnRNP-L, PTB, and PCBP that are up-regulated in infant leukemia cells. Forced expression of the mutant CD22ΔE12 protein in transgenic mice perturbs B-cell development, as evidenced by B-precursor/B-cell hyperplasia, and corrupts the regulation of gene expression, causing reduced expression levels of several genes with a tumor suppressor function. We further show that CD22ΔE12-associated unique gene expression signature is a discriminating feature of newly diagnosed infant leukemia patients. These striking findings implicate CD22ΔE12 as a previously undescribed pathogenic mechanism in human B-precursor leukemia.