BCR-ABL is an oncogenic tyrosine kinase expressed in chronic myelogenous leukemia (CML) cells and is the main target of the tyrosine kinase inhibitor imatinib mesylate. Imatinib-based CML therapy induces hematological and cytogenetic remission in early phase CML patients whereas more advanced patients frequently develop resistance to imatinib by multiple mechanisms, including mutations in the BCR-ABL kinase domain and over-expression of tyrosine kinases that are not inhibited by imatinib. These observations suggest that dual inhibition of src and abl kinases may circumvent imatinib resistance and provide more effective therapy for CML. BMS-354825 is a novel tyrosine kinase inhibitor that inhibits both abl and src kinases at low nM concentrations and is currently being clinically evaluated in imatinib resistant or intolerant CML patients. Our earlier studies demonstrated that increased expression of the src-related kinase Lyn in BCR-ABL expressing K562 cells was associated with imatinib resistance in this cell model and some CML patients. To determine whether inhibition of SRC/ABL kinases differentially affects imatinib sensitive K562 (BCR-ABL +, Lyn −) and resistant K562R (BCR-ABL +, Lyn +) cells were treated with imatinib or BMS-354825 before analysis of cell growth, survival and signaling. BMS-354825 induced apoptosis in both K562 and K562R cells which correlated with inhibition of both Lyn activation and BCR-ABL signaling (CrkL). BMS-354825 effectively reduced both K562 and K562R tumor growth in nude mice whereas imatinib had minimal effects on K562R tumors. Clinical specimens from imatinib resistant CML patients (with and without BCR-ABL kinase mutations) were treated with imatinib or BMS-354825 and analyzed for changes in Lyn and Hck activation. While imatinib had minimal inhibitory effects on Lyn/Hck activation, BMS-354825 completely suppressed Lyn/Hck phosphorylation which correlated with its greater anti-tumor activity in CML samples. BCR-ABL tyrosine phosphorylation was not inhibited by imatinib in Cos cells co-expressing BCR-ABL and Lyn kinase and loss of imatinib sensitivity was totally dependent on Lyn kinase activity. BMS-354825 reduced both Lyn and BCR-ABL activation in co-expressing cells, suggesting that Lyn-mediated phosphorylation plays a direct role in imatinib resistance. We conclude that dual inhibition of SRC/ABL kinases in CML cells by BMS-354825 overcomes resistance to imatinib in vitro and in vivo and induces anti-tumor effects in CML patient specimens resistant to imatinib through expression of imatinib-inactivating BCR-ABL kinase mutations as well as other resistance mechanisms.