Atypical chronic myeloid leukemia (aCML) shares clinical and laboratory features with CML, but it lacks the BCR-ABL1 fusion. We performed exome sequencing of eight aCMLs and identified somatic alterations of SETBP1 (encoding a p.Gly870Ser alteration) in two cases. Targeted resequencing of 70 aCMLs, 574 diverse hematological malignancies and 344 cancer cell lines identified SETBP1 mutations in 24 cases, including 17 of 70 aCMLs (24.3%; 95% confidence interval (CI) = 16-35%). Most mutations (92%) were located between codons 858 and 871 and were identical to changes seen in individuals with Schinzel-Giedion syndrome. Individuals with mutations had higher white blood cell counts (P = 0.008) and worse prognosis (P = 0.01). The p.Gly870Ser alteration abrogated a site for ubiquitination, and cells exogenously expressing this mutant exhibited higher amounts of SETBP1 and SET protein, lower PP2A activity and higher proliferation rates relative to those expressing the wild-type protein. In summary, mutated SETBP1 represents a newly discovered oncogene present in aCML and closely related diseases.