Chronic myelogenous leukaemia (CML) and Philadelphia chromosome positive (Ph+) acute lymphoblastic leukaemia (ALL) are caused by the BCR-ABL oncogene. Imatinib inhibits the tyrosine kinase activity of the BCR-ABL protein and is an effective, frontline therapy for chronic-phase CML. However, accelerated or blast-crisis phase CML patients and Ph+ ALL patients often relapse due to drug resistance resulting from the emergence of imatinib-resistant point mutations within the BCR-ABL tyrosine kinase domain. This has stimulated the development of new kinase inhibitors that are able to over-ride resistance to imatinib. The novel, selective BCR-ABL inhibitor, AMN107, was designed to fit into the ATP-binding site of the BCR-ABL protein with higher affinity than imatinib. In addition to being more potent than imatinib (IC50< 30 nM) against wild-type BCR-ABL, AMN107 is also significantly active against 32/33 imatinib-resistant BCR-ABL mutants. In preclinical studies, AMN107 demonstrated activity in vitro and in vivo against wild-type and imatinib-resistant BCR-ABL-expressing cells. In phase I/II clinical trials, AMN107 has produced haematological and cytogenetic responses in CML patients, who either did not initially respond to imatinib or developed imatinib resistance. Dasatinib (BMS-354825), which inhibits Abl and Src family kinases, is another promising new clinical candidate for CML that has shown good efficacy in CML patients. In this review, the early characterisation and development of AMN107 is discussed, as is the current status of AMN107 in clinical trials for imatinib-resistant CML and Ph+ ALL. Future trends investigating prediction of mechanisms of resistance to AMN107, and how and where AMN107 is expected to fit into the overall picture for treatment of early-phase CML and imatinib-refractory and late-stage disease are discussed.