The t (12; 21)(p13; q22) is identified by routine cytogenetics in less than 0.05% of pediatric acute lymphoblastic leukemia (ALL) patients. This translocation encodes a TEL/AML-1 chimeric product comprising the helix-loop-helix domain of TEL, a member of the ETS-like family of transcription factors, fused to AML-1, the DNA-binding subunit of the AML-1/CBF beta transcription factor complex. Both TEL and AML-1 are involved in several myeloid leukemia-associated translocations with AML-1/CBF beta being altered in 20-30% of de novo acute myeloid leukemia (AML) cases. We now demonstrate that a TEL/AML1 chimeric transcript encoded by a cryptic t (12; 21) is observed in 22% of pediatric ALL, making it the most common genetic lesion in these patients. Moreover, TEL/AML1 expression defined a distinct subgroup of patients characterized by an age between 1 and 10 years, B lineage immunophenotype, non-hyperdiploid DNA content and an excellent prognosis. These data demonstrate that molecular diagnostic approaches are invaluable in identifying clinically distinct subgroups, and that the AML1/CBF beta transcription complex is the most frequent target of chromosomal rearrangements in human leukemia.