The Philadelphia chromosome generates a chimeric oncogene in which the BCR and c-ABL genes are fused. The product of this oncogene, BCR/ABL, has elevated ABL tyrosine kinase activity, relocates to the cytoskeleton, and phosphorylates multiple cellular substrates. BCR/ABL transforms hematopoietic cells and exerts a wide variety of biological effects, including reduction in growth factor dependence, enhanced viability, and altered adhesion of chronic myelocytic leukemia (CML) cells. Elevated tyrosine kinase activity of BCR/ABL is critical for activating downstream signal transduction and for all aspects of transformation. This review will describe mechanisms of transformation by the BCR/ABL oncogene and opportunities for clinical intervention with specific signal transduction inhibitors such as STI-571 in CML.