The full-length AML1-ETO (AE) fusion gene resulting from t(8;21)(q22;q22) in human acute myeloid leukemia (AML) is not sufficient to induce leukemia in animals, suggesting that additional mutations are required for leukemogenesis. We and others have identified activating mutations of C-KIT in nearly half of patients with t(8;21) AML. To test the hypothesis that activating C-KIT mutations cooperate with AE to cause overt AML, we generated a murine transduction and transplantation model with both mutated C-KIT and AE. To overcome the intracellular transport block of human C-KIT in murine cells, we engineered hybrid C-KIT (HyC-KIT) by fusing the extracellular and transmembrane domains of the murine c-Kit in-frame to the intracellular signaling domain of human C-KIT. We showed that tyrosine kinase domain mutants HyC-KIT N822K and D816V, as well as juxtamembrane mutants HyC-KIT 571+14 and 557-558Del, could transform murine 32D cells to cytokine-independent growth. The protein tyrosine kinase inhibitor dasatinib inhibited the proliferation of 32D cells expressing these C-KIT mutants, with potency in the low nanomolar range. In mice, HyC-KIT N822K induced a myeloproliferative disease, whereas HyC-KIT 571+14 induces both myeloproliferative disease and lymphocytic leukemia. Interestingly, coexpression of AE and HyC-KIT N822K led to fatal AML. Our data have further enriched the two-hit model that abnormalities of both transcription factor and membrane/cytosolic signaling molecule are required in AML pathogenesis. Furthermore, dasatinib prolonged lifespan of mice bearing AE and HyC-KIT N822K-coexpressing leukemic cells and exerted synergic effects while combined with cytarabine, thus providing a potential therapeutic for t(8;21) leukemia.