The TEL/PDGFβR fusion protein is expressed as the consequence of a recurring t(5;12) translocation associated with chronic myelomonocytic leukemia (CMML). Unlike other activated protein tyrosine kinases associated with hematopoietic malignancies, TEL/PDGFβR is invariably associated with a myeloid leukemia phenotype in humans. To test the transforming properties of TEL/PDGFβR in vivo, and to analyze the basis for myeloid lineage specificity in humans, we constructed transgenic mice with TEL/PDGFβR expression driven by a lymphoid-specific immunoglobulin enhancer-promoter cassette. These mice developed lymphoblastic lymphomas of both T and B lineage, demonstrating that TEL/PDGFβR is a transforming protein in vivo, and that the transforming ability of this fusion is not inherently restricted to the myeloid lineage. Treatment of TEL/PDGFβR transgenic animals with a protein tyrosine kinase inhibitor with in vitro activity against PDGFβR (CGP57148) resulted in suppression of disease and a prolongation of survival. A therapeutic benefit was apparent both in animals treated before the development of overt clonal disease and in animals transplanted with clonal tumor cells. These results suggest that small-molecule tyrosine kinase inhibitors may be effective treatment for activated tyrosine kinase–mediated malignancies both early in the course of disease and after the development of additional transforming mutations.