Abstract We show the molecular and functional characterization of a novel population of lineage-negative CD34-negative (Lin−CD34−) hematopoietic stem cells from chronic myelogenous leukemia (CML) patients at diagnosis. Molecular karyotyping and quantitative analysis of BCR-ABL transcript demonstrated that approximately one-third of CD34− cells are leukemic. CML Lin−CD34− cells showed kinetic quiescence and limited clonogenic capacity. However, stroma-dependent cultures induced CD34 expression on some cells and cell cycling, and increased clonogenic activity and expression of BCR-ABL transcript. Lin−CD34− cells showed hematopoietic cell engraftment rate in 2 immunodeficient mouse strains similar to Lin-CD34+ cells, whereas endothelial cell engraftment was significantly higher. Gene expression profiling revealed the down-regulation of cell-cycle arrest genes and genes involved in antigen presentation and processing, while the expression of genes related to tumor progression, such as angiogenic factors, was strongly up-regulated compared with normal counterparts. Phenotypic analysis confirmed the significant down-regulation of HLA class I and II molecules in CML Lin−CD34− cells. Imatinib mesylate did not reduce fusion transcript levels, BCR-ABL kinase activity, and clonogenic efficiency of CML Lin−CD34− cells in vitro. Moreover, leukemic CD34− cells survived exposure to BCR-ABL inhibitors in vivo. Thus, we identified a novel CD34− leukemic stem cell subset in CML with peculiar molecular and functional characteristics.