Actual BCR-ABL kinase inhibition in vivo as determined by phospho-CRKL (pCRKL) monitoring has been recognized as a prognostic parameter in patients with chronic myelogenous leukemia treated with imatinib. We report a biomarker sub-study of the international phase I clinical trial of nilotinib (AMN107) using the established pCRKL assay in imatinib-resistant chronic myeloid leukemia or Ph+ acute lymphoblastic leukemia. A minimum dose (200 mg) required for effective BCR-ABL inhibition in imatinib resistant/intolerant leukemia was determined. The pre-clinical activity profile of nilotinib against mutant BCR-ABL was largely confirmed. Substantial differences between peripheral blood baseline pCRKL/CRKL ratios were observed when comparing chronic myeloid leukemia with Ph+ acute lymphoblastic leukemia. Finally, rapid BCR-ABL-reactivation shortly after starting nilotinib treatment was seen in acute lymphoblastic leukemia patients with progressive disease carrying the P-loop mutations Y253H, E255K, or mutation T315I. Monitoring the actual BCR-ABL inhibition in nilotinib treated patients using pCRKL as a surrogate is a means to establish effective dosing and to characterize resistance mechanisms against nilotinib.