B cell lineage acute lymphoblastic leukemia (ALL) arises in virtually all cases from B cell precursors that are arrested at pre-B cell receptor-dependent stages. The Philadelphia chromosome-positive (Ph<sup>+</sup>) subtype of ALL accounts for 25-30% of cases of adult ALL, has the most unfavorable clinical outcome among all ALL subtypes and is defined by the oncogenic BCR-ABL1 kinase and deletions of the IKAROS gene in >80% of cases. Here, we demonstrate that the pre-B cell receptor functions as a tumor suppressor upstream of IKAROS through induction of cell cycle arrest in Ph<sup>+</sup> ALL cells. Pre-B cell receptor-mediated cell cycle arrest in Ph<sup>+</sup> ALL cells critically depends on IKAROS function, and is reversed by coexpression of the dominant-negative IKAROS splice variant IK6. IKAROS also promotes tumor suppression through cooperation with downstream molecules of the pre-B cell receptor signaling pathway, even if expression of the pre-B cell receptor itself is compromised. In this case, IKAROS redirects oncogenic BCR-ABL1 tyrosine kinase signaling from SRC kinase-activation to SLP65, which functions as a critical tumor suppressor downstream of the pre-B cell receptor. These findings provide a rationale for the surprisingly high frequency of IKAROS deletions in Ph<sup>+</sup> ALL and identify IKAROS-mediated cell cycle exit as the endpoint of an emerging pathway of pre-B cell receptor-mediated tumor suppression
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