Chronic myeloid leukemia (CML) is characterized by expression of the tyrosine kinase oncogene, Bcr-abl. Tyrosine kinase inhibitors (TKI) induce prolonged remission in CML, and therapy discontinuation is an accepted approach to patients with reduction in Bcr-abl transcripts of four logs or greater. Half such individuals sustain a therapy free remission, but molecular mechanisms predicting relapse are undefined. We found relative calpain inhibition in CML cells with stabilization of calpain substrates, including βcatenin and Xiap1. Since the Survivin gene is activated by βcatenin, this identified two apoptosis-resistance mechanisms. We found that Survivin impaired apoptosis in leukemia stem cells (LSCs) and Xiap1 in CML granulocytes. Consistent with this, we determined treatment with an inhibitor of Survivin, but not Xiap1, prevented relapse during TKI treatment and after therapy discontinuation in a murine CML model. By transcriptome profiling, we identified activation of innate immune response pathways in murine CML bone marrow progenitors. This was increased by TKI treatment alone, but normalized with addition of a Survivin inhibitor. We found that activation of the innate immune response induced rapid blast crisis in untreated CML mice, and chronic phase relapse during a TKI discontinuation attempt. These results suggest that extrinsic stress exerts adverse effects on CML-LSCs.