Chronic myelomonocytic leukemia (CMML) is a myelodysplastic syndrome characterized by abnormal clonal myeloid proliferation and by progression to acute myelogenous leukemia (AML). CMML thus offers an opportunity to study early genetic events in the transition to AML. A recently recognized sub group of CMML has a t(5;12)(q33;p13) balanced translocation. We report that the consequence of the t(5;12) translocation is expression of a fusion transcript in which the tyrosine kinase domain of the platelet-derived growth factor receptor β (PDGFRβ) on chromosome 5 is coupled to a novel ets-like gene, tel, on chromosome 12. The tel-PDGFRβ fusion demonstrates the oncogenic potential of PDGFRβ and may provide a paradigm for early events in the pathogenesis of AML.