Chronic myeloid leukemia (CML) is a myeloproliferative disorder characterized by the t(9;22) translocation coding for the chimeric protein p210 BCR-ABL. The tumor suppressor phosphatase and tensin homolog (PTEN) has recently been shown to have a critical role in the pathogenesis of CML. Nuclear localization and proper nuclear-cytoplasmic shuttling are crucial for PTEN's tumor suppressive function. In this study, we show that BCR-ABL enhances HAUSP-induced de-ubiquitination of PTEN in turn favoring its nuclear exclusion. We further demonstrate that BCR-ABL physically interacts with and phosphorylates HAUSP on tyrosine residues to trigger its activity. Importantly, we also find that PTEN delocalization induced by BCR-ABL does not occur in the leukemic stem cell compartment due to high levels of PML, a potent inhibitor of HAUSP activity toward PTEN. We therefore identify a new proto-oncogenic mechanism whereby BCR-ABL antagonizes the nuclear function of the PTEN tumor suppressor, with important therapeutic implications for the eradication of CML minimal residual disease.