Bcr-Abl plays a critical role in the pathogenesis of chronic myelogenous leukemia (CML). It was previously shown that expression of Bcr-Abl in bone marrow cells by retroviral transduction efficiently induces a myeloproliferative disorder (MPD) in mice resembling human CML. This in vivo experimental system allows the direct determination of the effect of specific domains of Bcr-Abl, or specific signaling pathways, on the complex in vivo pathogenesis of CML. In this report, the function of the SH2 domain of Bcr-Abl in the pathogenesis of CML is examined using this murine model. It was found that the Bcr-Abl SH2 mutants retain the ability to induce a fatal MPD but with an extended latency compared with wild type (wt) Bcr-Abl. Interestingly, in contrast to wt Bcr-Abl–induced disease, which is rapid and monophasic, the disease caused by the Bcr-Abl SH2 mutants is biphasic, consisting of an initial B-lymphocyte expansion followed by a fatal myeloid proliferation. The B-lymphoid expansion was diminished in mixing experiments with bcr-abl/ΔSH2 and wt bcr-ablcells, suggesting that the Bcr-Abl–induced MPD suppresses B-lymphoid expansion.