Chronic myeloid leukaemia (CML) is a myeloproliferative disorder characterized by uncontrolled growth of progenitor cells expressing the tyrosine kinase fusion gene product, Bcr-Abl. At present, little is known regarding how TGFß, and downstream Smad transcription factors, influence CML cell proliferation in the context of Bcr-Abl expression. Here we show that ectopic Bcr-Abl expression dramatically increases TGFß/Smad-dependent transcriptional activity in Cosl cells, and that this may be due to enhancement of Smad promoter activity. Bcr-Abl expressing TF-1 myeloid cells are more potently growth arrested by TGFß compared to the parental TF-1 cell line. Additionally, growth of Bcr-Abl-expressing CD34+ cells from chronic phase CML patients is inhibited by TGFß and, interestingly, treatment of a non-proliferating CD34+ CML cell sub-population with the TGFß kinase inhibitor SB431542 enhanced cell death mediated by the Bcr-Abl inhibitor imatinib. Our data suggest that the expression of Bcr-Abl leads to hyper-responsiveness of myeloid cells to TGFß, and we hypothesise that this novel cross-regulatory mechanism might play an important role in maintaining the transformed progenitor cell population in CML.