Sequences encoded by the first exon of BCR that bind to the ABL SH2 domain are essential for the activation of the ABL tyrosine kinase and transforming potential of the chimeric BCR-ABL oncogene. The normal cellular BCR gene encodes a 160,000 dalton phosphoprotein associated with a serine/threonine kinase activity, but it shows only weak dispersed homologies to protein kinases. p160c-BCR was purified to apparent homogeneity as an oligomer of greater than 600,000 daltons that contains autophosphorylation activity and transphosphorylation activity for several protein substrates. A region containing paired cysteine residues within the 426 amino acids encoded by the first exon of BCR is essential for its novel phosphotransferase activity, which overlaps with the strong SH2-binding regions. The recent demonstration of a GTPase-activating function within the C-terminal portion of BCR suggests that the protein kinase and SH2-binding domains may work in concert with other regions of the molecule in intracellular signalling processes.