Chromosomal rearrangements involving band 12p13 are found in a wide variety of human leukemias but are particularly common in childhood acute lymphoblastic leukemia. The genes involved in these rearrangements, however, have not been identified. We now report the cloning of a t(12;21) translocation breakpoint involving 12p13 and 21q22 in two cases of childhood pre-B acute lymphoblastic leukemia, in which t(12;21) rearrangements were not initially apparent. The consequence of the translocation is fusion of the helix-loop-helix domain of TEL, an ETS-like putative transcription factor, to the DNA-binding and transactivation domains of the transcription factor AML1. These data show that TEL, previously shown to be fused to the platelet-derived growth factor receptor beta in chronic myelomonocytic leukemia, can be implicated in the pathogenesis of leukemia through its fusion to either a receptor tyrosine kinase or a transcription factor. The TEL-AML1 fusion also indicates that translocations affecting the AML1 gene can be associated with lymphoid, as well as myeloid, malignancy.