The c-ABL proto-oncogene is a predominantly nuclear localized tyrosine kinase. A random mutagenesis scheme was used to isolate c-ABL mutants whose expression produced a transformed phenotype in rodent fibroblast cells. An in-frame deletion within the central region of the last exon was identified in one ABL mutant. The mechanism of c-ABL oncogenic activation by mutation within the last exon differs both functionally and structurally from those of v-ABL and BCR/ABL. This class of ABL mutants shows increased tyrosine phosphorylation of cellular proteins in vivo but low levels of autophosphorylation. Last-exon ABL mutants are distinguished from v-ABL or BCR/ABL by their inability to transform primary bone marrow cells or support the growth of transformed pre-B cells. These findings define a new mechanism of oncogenic activation for the ABL kinase through mutations in the last exon which do not require amino-terminal deletions or mutations within the src homology regions.