Chronic myeloid leukemia (CML) is a malignant stem cell disease characterized by an expansion of myeloid progenitor cells expressing the constitutively activated Bcr-Abl kinase. This oncogenic event causes a deregulation of apoptosis and cell cycle progression. Although the molecular mechanisms protecting from apoptosis in CML cells are well characterized, the cell cycle regulatory event is poorly understood. An inhibitor of the cyclin-dependent kinases, p27, plays a central role in the regulation of growth factor dependent proliferation of hematopoietic cells. Therefore, we have analyzed the influence of Bcr-Abl in the regulation of p27 expression in various hematopoietic cell systems. An active Bcr-Abl kinase causes down-regulation of p27 expression in murine Ba/F3 cells and human M07 cells. Bcr-Abl blocks up-regulation of p27 after growth factor withdrawal and serum reduction. In addition, p27 induction by transforming growth factor-beta (TGF-beta) is completely blocked in Bcr-Abl positive M07/p210 cells. This deregulation is directly mediated by the activity of the Bcr-Abl kinase. A Bcr-Abl kinase inhibitor completely abolishes p27 down-regulation by Bcr-Abl in both Ba/F3 cells transfected either with a constitutively active Bcr-Abl or with a temperature sensitive mutant. The down-regulation of p27 by Bcr-Abl depends on proteasomal degradation and can be blocked by lactacystin. Overexpression of wild-type p27 partially antagonizes Bcr-Abl-induced proliferation in Ba/F3 cells. We conclude that Bcr-Abl promotes cell cycle progression and activation of cyclin-dependent kinases by interfering with the regulation of the cell cycle inhibitory protein p27. (Blood. 2000;96:1933-1939)