Although the identification and characterization of translocations have rapidly increased, little is known about the mechanisms of how translocations occur in vivo. We used anaplastic large cell lymphoma (ALCL) with and without the characteristic t(2;5)(p23;q35) translocation to study the mechanisms of formation of translocations and of ALCL transformation. We report deregulation of several genes located near the ALCL translocation breakpoint, regardless of whether the tumor contains the t(2;5). The affected genes include the oncogenic transcription factor Fra2 (located on 2p23), the HLH protein Id2 (2p25), and the oncogenic tyrosine kinase CSF1-receptor (5q33.1). Their up-regulation promotes cell survival and repression of T cellspecific gene expression programs that are characteristic for ALCL. The deregulated genes are in spatial proximity within the nuclear space of t(2;5)-negative ALCL cells, facilitating their translocation on induction of double-strand breaks. These data suggest that deregulation of breakpoint-proximal genes occurs before the formation of translocations, and that aberrant transcriptional activity of genomic regions is linked to their propensity to undergo chromosomal translocations. Also, our data demonstrate that deregulation of breakpoint-proximal genes has a key role in ALCL.cancer genetics ͉ signal transduction ͉ nuclear architecture ͉ lymphomatoid papulosis B alanced chromosomal translocations are a hallmark of cancer cells, and are thought to be important, if not causal, for hematopoietic and mesenchymal tumorigenesis (1). At the molecular level, translocations generally result in either altered expression of genes located directly at a breakpoint, or in fusion of genes located at the 2 breakpoints (1). In most cases, the affected genes are transcription factors or tyrosine kinases, and the translocation generally leads to their inactivation or constitutive activation. This defect often causes inhibition of differentiation or uncontrolled proliferation. Nevertheless, translocations are, at least in some cases, not sufficient to fully transform cells, because chromosomal disease-associated translocations are present in healthy individuals (2), and transgenic mice expressing known tumor fusion proteins do not spontaneously develop tumors in most cases (1, 2).The translocation t(2;5)(p23;q35) is characteristic for anaplastic large cell lymphoma (ALCL), a subgroup of peripheral T cell lymphomas (TCL) (3, 4). By fusion of the 5Ј oligomerization domain of the nucleophosmin (NPM1) gene (located on 5q35) with the 3Ј anaplastic lymphoma kinase (ALK) tyrosine kinase domain (2p23), this translocation results in a NPM-ALK fusion protein with constitutive activation of the ALK kinase (3). Several questions regarding the pathogenesis of ALCL are unresolved. First, in Ϸ40% of systemic ALCL, the translocation t(2;5) is not present (4), suggesting yet unknown alternative mechanisms of transformation. Second, the expression of NPM-ALK per se might not be sufficient for malignant transformation to ALC...