Emergence of genetic resistance against kinase inhibitors poses a great challenge for durable therapeutic response. Here, we report a novel mechanism of JAK2 kinase inhibition by fedratinib (TG101348) that prevents emergence of genetic resistance. Using in vitro drug screening, we identified 211 amino-acid substitutions conferring resistance to ruxolitinib (INCB018424) and cross-resistance to the JAK2 inhibitors AZD1480, CYT-387 and lestaurtinib. In contrast, these resistant variants were fully sensitive to fedratinib. Structural modeling, coupled with mutagenesis and biochemical studies, revealed dual binding sites for fedratinib. In vitro binding assays using purified proteins showed strong affinity for the substrate-binding site (Kd = 20 nM) while affinity for the ATP site was poor (Kd = ~8 μM). Our studies demonstrate that mutations affecting the substrate-binding pocket encode a catalytically incompetent kinase, thereby preventing emergence of resistant variants. Most importantly, our data suggest that in order to develop resistance-free kinase inhibitors, the next-generation drug design should target the substrate-binding site.