The TEL-Syk fusion protein was isolated from a patient with myelodysplasia with megakaryocyte blasts. Expression of TEL-Syk transforms interleukin-3 (IL-3)-dependent Ba/F3 cells in vitro by deregulating STAT5-mediated signal transduction pathways. In vivo, TEL-Syk expression in pre-B cells blocks B cell differentiation, leading to lymphoid leukemia. Here, we demonstrate that TEL-Syk introduced into fetal liver hematopoietic cells, which are then adoptively transferred into lethally irradiated recipients, leads to an aggressive myelodysplasia with myelofibrosis that is lethal in mice by 60-75 days. Expression of TEL-Syk induces a short-lived myeloexpansion that is rapidly followed by bone marrow failure and extreme splenic/hepatic fibrosis accompanied by extensive apoptosis. The disease is dependent on Syk kinase activity. Analysis of serum from TEL-Syk mice reveals an inflammatory cytokine signature reminiscent of that found in the sera from patients and mouse models of myeloproliferative neoplasms. TEL-Syk expressing cells showed constitutive STAT5 phosphorylation, which was resistant to JAK inhibition, consistent with deregulated cytokine signaling. These data indicate that expression of TEL-Syk in fetal liver hematopoietic cells results in JAK-independent STAT5 phosphorylation ultimately leading to a uniquely aggressive and lethal form of myelofibrosis.