The tyrosine kinase inhibitor STI571 inhibits BCR/ABL and induces hematologic remission in most patients with chronic myeloid leukemia. In addition to BCR/ABL, STI571 also inhibits v-Abl, TEL/ABL, the native platelet-derived growth factor (PDGF)beta receptor, and c-KIT, but it does not inhibit SRC family kinases, c-FMS, FLT3, the epidermal growth factor receptor, or multiple other tyrosine kinases. ARG is a widely expressed tyrosine kinase that shares substantial sequence identity with c-ABL in the kinase domain and cooperates with ABL to regulate neurulation in the developing mouse embryo. As described here, ARG has recently been implicated in the pathogenesis of leukemia as a fusion partner of TEL. A TEL/ARG fusion was constructed to determine whether ARG can be inhibited by STI571. When expressed in the factor-dependent murine hematopoietic cell line Ba/F3, the TEL/ARG protein was heavily phosphorylated on tyrosine, increased tyrosine phosphorylation of multiple cellular proteins, and induced factor-independent proliferation. The effects of STI571 on Ba/F3 cells transformed with BCR/ABL, TEL/ABL, TEL/PDGFbetaR, or TEL/ARG were then compared. STI571 inhibited tyrosine phosphorylation and cell growth of Ba/F3 cells expressing BCR/ABL, TEL/ABL, TEL/PDGFbetaR, and TEL/ARG with an IC(50) of approximately 0.5 microM in each case, but it had no effect on untransformed Ba/F3 cells growing in IL-3 or on Ba/F3 cells transformed by TEL/JAK2. Culture of TEL/ARG-transfected Ba/F3 cells with IL-3 completely prevented STI571-induced apoptosis in these cells, similar to what has been observed with BCR/ABL- or TEL/ABL-transformed cells. These results indicate that ARG is a target of the small molecule, tyrosine kinase inhibitor STI571.