The MN1-TEL (meningioma 1-translocation-ETS-leukemia) fusion oncoprotein is the product of the t(12;22)(p13;q11) in human myeloid leukemia consisting of N-terminal MN1 sequences, a transcriptional coactivator, fused to C-terminal TEL sequences, an E26-transformation-specific (ETS) transcription factor. To analyze the role of MN1-TEL in leukemogenesis, we created a site-directed transgenic (knock-in) mouse model carrying a conditional MN1-TEL transgene under the control of the Aml1 regulatory sequences. After induction, MN1-TEL expression was detected in both myeloid and lymphoid cells. Activation of MN1-TEL expression enhanced the repopulation ability of myeloid progenitors in vitro as well as partially inhibited their differentiation in vivo. MN1-TEL also promoted the proliferation of thymocytes while it blocked their differentiation from CD4-/CD8- to CD4+/CD8+ in vivo. After long latency, 30% of the MN1-TEL-positive mice developed T-lymphoid tumors. This process was accelerated by N-ethyl-N-nitrosourea-induced mutations. MN1-TEL-positive T-lymphoid tumors showed elevated expression of the Notch-1, Hes-1, c-Myc, and Lmo-2 genes while their Ink4a/pRB and Arf/p53 pathways were impaired, suggesting that these alterations cooperatively transform T progenitors. We conclude that MN1-TEL exerts its nonlineage-specific leukemogenic effects by promoting the growth of primitive progenitors and blocking their differentiation, but cooperative mutations are necessary to fully induce leukemic transformation.