Chronic myeloid leukemia (CML) is characterized by the presence of the constitutively active BCR-ABL protein tyrosine kinase. Using a multipotent hemopoietic cell line, FDCP-Mix, expressing BCR-ABL tyrosine kinase, we investigated the initial effects of this kinase in primitive hematopoietic stem cells. We identified down-regulation of a novel gene, CCN3, as a direct consequence of BCR-ABL kinase activity. CCN3 has been reported to function as a tumor suppressor gene in solid tumors. Northern and Western blotting plus immunocytochemical analysis confirmed CCN3 expression is decreased and is tyrosine-phosphorylated in BCR-ABL kinase active FDCP-Mix cells. Decreased cellular CCN3 correlated with increased CCN3 secretion in BCR-ABL kinase active cells. In vitro treatment of human CML cell lines with imatinib or siRNA directed against BCR-ABL significantly reduced BCR-ABL while increasing CCN3 expression. Cells from patients responding to imatinib showed a similar decrease in BCR-ABL and increase in CCN3. CML CD34(+) cells treated with imatinib in vitro demonstrated increased CCN3 protein. Transfecting CCN3 into BCR-ABL(+) cells inhibited proliferation and decreased clonogenic potential. CCN3 plays an important role in internal and external cell-signaling pathways. Thus, BCR-ABL can regulate protein levels by governing secretion, a novel mechanism for this tyrosine kinase.