The pericentric inversion of chromosome 16 [inv(16)(p13q22)] is a characteristic karyotypic abnormality associated with acute myeloid leukemia, most commonly of the M4Eo subtype. The 16p and 16q breakpoints were pinpointed by yeast artificial chromosome and cosmid cloning, and the two genes involved in this inversion were identified. On 16q the inversion occurred near the end of the coding region for CBF beta, also known as PEBP2 beta, a subunit of a heterodimeric transcription factor regulating genes expressed in T cells; on 16p a smooth muscle myosin heavy chain (SMMHC) gene (MYH11) was interrupted. In six of six inv(16) patient samples tested, an in-frame fusion messenger RNA was demonstrated that connected the first 165 amino acids of CBF beta with the tail region of SMMHC. The repeated coiled coil of SMMHC may result in dimerization of the CBF beta fusion protein, which in turn would lead to alterations in transcriptional regulation and contribute to leukemic transformation.