Interferon alpha (IFNalpha) has significant clinical activity in the treatment of patients with chronic myelogenous leukaemia (CML), but the mechanisms of its selective efficacy in the treatment of the disease are unknown. The CrkL adaptor protein interacts directly with the BCR-ABL fusion protein that causes the malignant transformation and is constitutively phosphorylated in BCR-ABL-expressing cells. In the present study, we provide evidence that CrkL was engaged in IFNalpha-signalling in the CML-derived KT-1 cell line, which expresses BCR-ABL and is sensitive to the growth inhibitory effects of IFNalpha. CrkL is constitutively associated with BCR-ABL in these cells and treatment with IFNalpha had no effect on the BCR-ABL/CrkL interaction. After IFNalpha stimulation, CrkL associated with Stat5, which also underwent phosphorylation in an IFNalpha-dependent manner. The interaction of CrkL with Stat5 was facilitated by the function of both the SH2 and the N-terminus SH3 domains of CrkL. The resulting CrkL-Stat5 complex translocated to the nucleus and could be detected in gel shift assays using elements derived from either the beta-casein promoter or the promoter of the PML gene, an IFNalpha-inducible gene that mediates growth inhibitory responses. In addition to its interaction with Stat5, CrkL interacts with C3G in KT-1 cells and such an interaction regulates the downstream activation of the small GTPase Rap1, which also mediates inhibition of cell proliferation. Thus, despite its engagement by BCR-ABL in CML-derived cells, CrkL mediates activation of downstream signalling pathways in response to the activated type I IFN receptor and such signals may contribute to the generation of the anti-proliferative effects of IFNalpha in CML.