Activation of oncogenes by mechanisms other than genetic aberrations such as mutations, translocations, or amplifications is largely undefined. Here we report a novel isoform of the anaplastic lymphoma kinase (ALK) that is expressed in ∼11% of melanomas and sporadically in other human cancer types, but not in normal tissues. The novel ALK transcript initiates from a de novo alternative transcription initiation (ATI) site in ALK intron 19, and was termed ALK^ATI. In ALK^ATI-expressing tumours, the ATI site is enriched for H3K4me3 and RNA polymerase II, chromatin marks characteristic of active transcription initiation sites. ALK^ATI is expressed from both ALK alleles, and no recurrent genetic aberrations are found at the ALK locus, indicating that the transcriptional activation is independent of genetic aberrations at the ALK locus. The ALK^ATI transcript encodes three proteins with molecular weights of 61.1, 60.8 and 58.7 kilodaltons, consisting primarily of the intracellular tyrosine kinase domain. ALK^ATI stimulates multiple oncogenic signalling pathways, drives growth-factor-independent cell proliferation in vitro, and promotes tumorigenesis in vivo in mouse models. ALK inhibitors can suppress the kinase activity of ALK^ATI, suggesting that patients with ALK^ATI-expressing tumours may benefit from ALK inhibitors. Our findings suggest a novel mechanism of oncogene activation in cancer through de novo alternative transcription initiation.