Constitutive activation of the BCR-ABL tyrosine kinase is fundamental to the pathogenesis of chronic myeloid leukemia (CML). STI571 inhibits this activity and modulates the transcription of several genes. It was shown by differential display that the suppressor of cytokine signaling-2 (SOCS-2) gene was down-regulated by STI571 treatment in 14 of 16 BCR-ABL-positive cell lines and in 2 BCR-ABL-transfected murine lines, but not in BCR-ABL-negative counterparts. The effect was maximal at 2 hours and persisted for at least 24 hours after exposure to 1 microM STI571, whereas SOCS-1 and SOCS-3 expression were unaffected. Baseline levels of SOCS-2 were significantly higher in BCR-ABL-positive as compared with BCR-ABL-negative cell lines. It was similar in leukocytes and CD34(+) cells from healthy persons (n = 44) and patients with CML in chronic phase (CP; n = 60) but significantly increased in patients with CML in blast crisis (BC; n = 20) (P <.0001). Mononuclear cells (MNCs) from 3 of 4 patients with CML in BC showed a 2-fold to 12-fold down-regulation of SOCS-2 levels on in vitro exposure to STI571; moreover, a 2-fold to 11-fold decrease in SOCS-2 was observed in MNCs from 7 of 8 patients with CML in BC who responded to treatment with STI571. Refractoriness to STI571 or relapse after initial response was accompanied by augmentation of SOCS-2 expression. Ectopic overexpression of SOCS-2 in 32Dp210 cells slowed growth, inhibited clonogenicity, and increased their motility and sensitivity to STI571. Overall, the results suggest that SOCS-2 is a component of a negative feedback mechanism; it is induced by Bcr-Abl but cannot reverse its overall growth-promoting effects in blastic transformation.