In Philadelphia chromosome-positive human leukemias, which include chronic myelogenous leukemia and some acute lymphocytic leukemias, the c-abl proto-oncogene on chromosome 9 becomes fused to the bcr gene on chromosome 22, and Bcr-Abl fusion proteins are produced. The Bcr sequences activate the Abl tyrosine kinase which is required for the transforming function of Bcr-Abl. The Bcr sequences also enhance an F-actin-binding activity associated with c-Abl. Here, we show that binding of c-Abl and Bcr-Abl proteins to actin filaments in vivo and in vitro is mediated by an evolutionarily conserved domain at the C-terminal end of c-Abl. The c-Abl F-actin-binding domain contains a consensus motif found in several other actin-crosslinking proteins. Mutations in the consensus motif are shown to abolish binding to F-actin. Bcr-Abl proteins unable to associate with F-actin have a reduced ability to transform Rat-1 fibroblasts and to abrogate the requirement for interleukin-3 in the lymphoblastoid cell line Ba/F3. In transformed cells, Bcr-Abl induces a redistribution of F-actin into punctate, juxtanuclear aggregates. The binding to actin filaments has important implications for the pathogenic and physiological functions of the Bcr-Abl and c-Abl proteins.