The BCR/ABL oncogene causes chronic myelogenous leukemia (CML) in humans and a CML-like disease, as well as lymphoid leukemia, in mice. p210 BCR/ABL is an activated tyrosine kinase that phosphorylates itself and several cellular signaling proteins. The autophosphorylation site tyrosine 177 binds the adaptor Grb2 and helps determine the lineage and severity of BCR/ABL disease: Tyr177 mutation (BCR/ABL-Y177F) dramatically impairs myeloid leukemogenesis, while diminishing lymphoid leukemogenesis. The critical signal(s) from Tyr177 has remained unclear. We report that Tyr177 recruits the scaffolding adaptor Gab2 via a Grb2/Gab2 complex. Compared to BCR/ABL-expressing Ba/F3 cells, BCR/ABL-Y177F cells exhibit markedly reduced Gab2 tyrosine phosphorylation and association of phosphatidylinositol-3 kinase (PI3K) and Shp2 with Gab2 and BCR/ABL, and decreased PI3K/Akt and Ras/Erk activation, cell proliferation, and spontaneous migration. Remarkably, bone marrow myeloid progenitors from Gab2 (-/-) mice are resistant to transformation by BCR/ABL, whereas lymphoid transformation is diminished as a consequence of markedly increased apoptosis. BCR/ABL-evoked PI3K/Akt and Ras/Erk activation also are impaired in Gab2 (-/-) primary myeloid and lymphoid cells. Our results identify Gab2 and its associated proteins as key determinants of the lineage and severity of BCR/ABL transformation.