Recent reports have shown that upon expression of appropriate oncogenes, both stem cells and more differentiated progenitor populations can serve as leukemia-initiating cells. These studies suggest that oncogenic mutations subvert normal development and induce reacquisition of stem-like features. However, no study has described how specific mutations influence the ability of differentiating cell subsets to serve as leukemia-initiating cells and if varying such cellular origins confers a functional difference. We have examined the role of the tumor suppressor gene p19(ARF) in a murine model of acute lymphoblastic leukemia and found that loss of p19(ARF) changes the spectrum of cells capable of tumor initiation. With intact p19(ARF), only hematopoietic stem cells (HSCs) can be directly transformed by BCR/ABL expression. In a p19(ARF)-null genetic background expression of the BCR/ABL fusion protein renders functionally defined HSCs, common lymphoid progenitors (CLP), and precursor B-lymphocytes competent to generate leukemia stem cells. Furthermore, we show that leukemias arising from p19(ARF)-null HSC versus pro-B cells differ biologically, including relative response to drug insult. Our observations elucidate a unique mechanism by which heterogeneity arises in tumor populations harboring identical genetic lesions and show that activity of p19(ARF) profoundly influences the nature of tumor-initiating cells during BCR/ABL-mediated leukemogenesis.