Various histological subtypes of leukaemia and lymphoma are associated with diagnostic chromosome translocations, and substantial strides have been made in determining the specific oncogenes targetted by those translocations. We report the cloning of a novel fusion oncogene associated with a unique leukaemia/lymphoma syndrome. Patients afflicted with this syndrome present with lymphoblastic lymphoma and a myeloproliferative disorder, often accompanied by pronounced peripheral eosinophilia and/or prominent eosinophilic infiltrates in the affected bone marrow, which generally progress to full-blown acute myelogenous leukaemia within a year of diagnosis. A specific chromosome translocation, t(8;13)(p11;q11-12), is found in both lymphoma and myeloid leukaemia cells from these patients, supporting bi-lineage differentiation from a transformed stem cell. We find that the 8p11 translocation breakpoints, in each of four patients, interrupt intron 8 of the fibroblast growth factor receptor 1 gene (FGFR1). These translocations are associated with aberrant transcripts in which four predicted zinc-finger domains, contributed by a novel and widely expressed chromosome-13 gene (ZNF198), are fused to the FGFR1 tyrosine-kinase domain. Transient expression studies show that the ZNF198-FGFR1 fusion transcript directs the synthesis of an approximately 87-kD polypeptide, localizing predominantly to the cytoplasm. Our studies demonstrate an FGFR1 oncogenic role and suggest a tumorigenic mechanism in which ZNF198-FGFR1 activation results from ZNF198 zinc-finger-mediated homodimerization.