A direct binding site for the Grb2 adapter protein is required for the induction of fatal chronic myeloid leukemia (CML)-like disease in mice by Bcr-Abl. Here, we demonstrate direct binding of Grb2 to the Tel-Abl (ETV6-Abl) fusion protein, the product of complex (9;12) chromosomal translocations in human leukemia, via tyrosine 314 encoded by TEL exon 5. A Tel-Abl point mutant (Y314F) and a splice variant without TEL exon 5 sequences (⌬e5) lacked Grb2 interaction and exhibited decreased binding and phosphorylation of the scaffolding protein Gab2 and impaired activation of phosphatidylinositol 3-kinase, Akt, and extracellular signal-regulated kinase/mitogen-activated protein kinase in hematopoietic cells. Tel-Abl Y314F and ⌬e5 were unable to transform fibroblasts to anchorage-independent growth and were defective for B-lymphoid transformation in vitro and lymphoid leukemogenesis in vivo. Previously, we demonstrated that full-length Tel-Abl induced two distinct myeloproliferative diseases in mice: CML-like leukemia similar to that induced by Bcr-Abl and a novel syndrome of small-bowel myeloid infiltration endotoxemia and hepatic and renal failure. Lack of the Grb2 binding site had no effect on development of small bowel syndrome but significantly attenuated the induction of CML-like disease by Tel-Abl. These results suggest that direct binding of Grb2 is a common mechanism contributing to leukemogenesis by oncogenic Abl fusion proteins.The BCR-ABL oncogene, the product of the t(9;22) Philadelphia (Ph) chromosome translocation, encodes a dysregulated cytoplasmic protein-tyrosine kinase, Bcr-Abl, that is the direct cause of the myeloproliferative disease chronic myeloid leukemia (CML) and Ph ϩ acute B-lymphoblastic leukemia (B-ALL). Bcr-Abl activates multiple intracellular signaling pathways including Ras, mitogen-activated protein kinase (MAPK), Jun N-terminal kinase (JNK), STAT5, and phosphatidylinositol 3-kinase (PI 3-kinase) (52) and transforms fibroblasts (33), cytokine-dependent hematopoietic cell lines (6,18), and primary bone marrow B-lymphoid cells (36) in vitro. Retroviral transduction of the BCR-ABL gene into murine bone marrow followed by transplantation into irradiated recipient mice results in the development of either CML-like myeloproliferative disease (30,44,62) or B-ALL (50) in all recipients, depending on the transduction conditions. The mouse retroviral bone marrow transduction/transplantation system provides accurate and quantitative models of human CML and Ph ϩ B-ALL (58) that have proven useful for analyzing the molecular pathophysiology of these diseases (15,29,30,39,50,63).Fusion of the ABL gene to a different partner, the TEL (ETV6) gene on chromosome 12p13, has been reported to occur in a small number of patients with leukemia, some who had acute leukemia of B-lymphoid (43), T-lymphoid (60), or myeloid (13, 40) origin and some who presented with atypical (3, 28) or typical (1, 60) CML. TEL encodes a ubiquitously expressed 452-amino-acid protein with homology to the Ets family of transcripti...