The ZNF198- FGFR1 fusion gene arises as a result of the t(8;13)(p11;q12) in the 8p11 myeloproliferative syndrome. To determine the transforming properties of this chimeric protein we transfected ZNF198-FGFR1 into the interleukin (IL)-3 dependent cell line Ba/F3. Growth factor independent subclones were obtained in which ZNF198-FGFR1, STAT1, and STAT5 were constitutively tyrosine phosphorylated, as determined by immunoprecipitation and Western blot analysis. To test the hypothesis that constitutive activation of ZNF198-FGFR1 tyrosine kinase activity is a result of self-association of the fusion protein, we in vitro transcribed and translated ZNF198-FGFR1 and a derivative construct, ZNF198- FGFR1deltaC-myc, in which the C-terminal FGFR1 epitope was replaced by a c-myc tag. As expected, an anti-FGFR1 antibody immunoprecipitated ZNF198-FGFR1 but not ZNF198-FGFRdeltaC-myc. However when both products were translated together, both were coimmunoprecipitated by anti-FGFR1 antisera. Similar results were obtained by using an anti-myc antibody and demonstrated a physical interaction between the two proteins. Analysis of COS-7 cells transfected with ZNF198-FGFR1 demonstrated that the fusion gene, in contrast to normal FGFR1, is located in the cytoplasm. We conclude that ZNF198-FGFR1 is a cytoplasmic protein that self-associates and has constitutive transformation activity. These data suggest that ZNF198-FGFR1 plays a primary role in the pathogenesis of the t(8;13) myeloproliferative syndrome and is the first report to implicate STAT proteins in FGFR1-mediated signaling.