BCR-ABL is a chimeric oncogene generated by translocation of sequences from the chromosomal counterpart (c-ABL gene) on chromosome 9 into the BCR gene on chromosome 22. Alternative chimeric proteins, BCR-ABL(p190) and BCR-ABL(p210), are produced that are characteristic of chronic myelogenous leukemia (CML) and Philadelphia chromosome-positive acute lymphoblastic leukemia (Ph(1)-ALL). In CML, the transformation occurs at the level of pluripotent stem cells. However, Ph(1)-ALL is thought to affect progenitor cells with lymphoid differentiation. Here we demonstrate that the cell capable of initiating human Ph(1)-ALL in non-obese diabetic mice with severe combined immunodeficiency disease (NOD/SCID), termed SCID leukemia-initiating cell (SL-IC), possesses the differentiative and proliferative capacities and the potential for self-renewal expected of a leukemic stem cell. The SL-ICs from all Ph(1)-ALL analyzed, regardless of the heterogeneity in maturation characteristics of the leukemic blasts, were exclusively CD34(+ )CD38(-), which is similar to the cell-surface phenotype of normal SCID-repopulating cells. This indicates that normal primitive cells, rather than committed progenitor cells, are the target for leukemic transformation in Ph(1)-ALL.