In a retrospective analysis, we previously reported that children whose leukemia cells harbored the TEL/AML1 gene rearrangement have excellent outcomes. From 1996 to 2000, we conducted a prospective study to determine the incidence and outcomes of children with TEL/AML1-positive acute lymphoblastic leukemia (ALL). Children with newly diagnosed ALL were treated on DFCI ALL Consortium Protocol 95-01. Patients were risk stratified primarily by current National Cancer Institute (NCI)-Rome risk criteria. With a median follow-up of 5.2 years, the 5-year event-free survival for TEL/AML1-positive patients was 89% compared with 80% for TEL/AML1-negative B-precursor patients (P = .05). The 5-year overall survival rate was 97% among TEL/AML-positive patients compared with 89% among TEL/AML1-negative patients (P = .03). However, in a multivariable analysis, risk group (age and leukocyte count at diagnosis) and asparaginase treatment group, but not TEL/AML1 status, were found to be independent predictors of outcome. We conclude that TEL/AML1-positive patients have excellent outcomes, confirming our previous findings. However, factors such as age at diagnosis and presenting leukocyte count should be taken into consideration when treating this group of patients.