Gelatinous bone marrow transformation (GBMT) is a rare pathologic entity of unclear etiology characterized by adipose cell atrophy, focal hematopoietic tissue hypoplasia, and a distinct eosinophilic substance that stains with Alcian blue at pH 2.5. It is traditionally described in the context of malnutrition and cachexia from generalized disease and is important to identify because of its potential reversibility. Several recent case reports have described GBMT in patients with chronic myeloid leukemia (CML) on the first-generation tyrosine-kinase inhibitor (TKI) imatinib. Here, we describe a case of gelatinous transformation in a patient with CML receiving the second-generation TKI dasatinib who subsequently developed clonal cytogenetic abnormalities in Philadelphia chromosome negative cells with excess peripheral blasts consistent with advanced secondary myelodysplastic syndrome. While the development of clonal cytogenetic abnormalities in Philadelphia-negative cells has been frequently described in the setting of TKI, most abnormalities are transient and generally do not effect disease progression and/or transformation like in this case. Remarkably, after TKI discontinuation, repeat bone marrow biopsies had markedly diminished amounts of gelatinous transformation - supporting reversible GBMT with TKI removal. We review the relevant pathophysiology underlying our patient's possible therapeutic-mediated complications during CML therapy in an attempt to better understand the role of TKIs in the pathogenesis of these conditions.