Pre-B lymphoblastic leukemia cells carrying a BCR-ABL1 gene rearrangement exhibit an undifferentiated phenotype. Comparing the genome-wide gene expression profiles of normal B-cell subsets and BCR-ABL1+ pre-B lymphoblastic leukemia cells by SAGE, the leukemia cells show loss of B lymphoid identity and aberrant expression of myeloid lineage-specific molecules. Consistent with this, BCR-ABL1+ pre-B lymphoblastic leukemia cells exhibit defective expression of IKAROS, a transcription factor needed for early lymphoid lineage commitment. As shown by inducible expression of BCR-ABL1 in human and murine B-cell precursor cell lines, BCR-ABL1 induces the expression of a dominant-negative IKAROS splice variant, termed IK6. Comparing matched leukemia sample pairs from patients before and during therapy with the BCR-ABL1 kinase inhibitor STI571 (Imatinib), inhibition of BCR-ABL1 partially corrected aberrant expression of IK6 and lineage infidelity of the leukemia cells. To elucidate the contribution of IK6 to lineage infidelity in BCR-ABL1+ cell lines, IK6 expression was silenced by RNA interference. Upon inhibition of IK6, BCR-ABL1+ leukemia cells partially restored B lymphoid lineage commitment. Therefore, we propose that BCR-ABL1 induces aberrant splicing of IKAROS, which interferes with lineage identity and differentiation of pre-B lymphoblastic leukemia cells.