Leukemias are cancers of the blood or bone marrow occurring from dysregulation of normal hematopoiesis. A genetically heterogenous clonal disorder, acute myeloid leukemia (AML) arises from myeloid precursor cells and is associated with nonrandom and recurrent chromosomal alterations which include translocations and deletions. Identification and molecular characterization of these alterations is important for disease diagnosis and treatment and for elucidation of genes involved in neoplastic transformation and progression. The goal of this project was to identify and functionally characterize the genes involved in a cryptic 11;17 translocation discovered in an AML patient. Identification of this translocation led to the discovery of a novel NUP98-PHF23 fusion gene. NUP98, a nucleoporin gene, is a frequent target of chromosomal translocations and one of the most promiscuous fusion partner genes in AML. NUP98 fusions are categorized as homeobox (HOX) or non-homeobox (non-HOX) fusion genes. This NUP98 fusion with PHF23, a new, uncharacterized gene predicted to function in chromatin regulation, is a non-HOX gene. Analyses have focused on NUP98-HOX fusion genes; thus, we sought to functionally characterize NUP98-PHF23. A block in blood cell development and terminal differentiation is a hallmark of leukemic transformation. K562, a leukemic myeloid progenitor cell line, is an established model of cellular differentiation and can be chemically induced to differentiate to megakaryocytes. We expressed NUP98-PHF23 in K562 cells and demonstrated impairment of induced differentiation. The PHF23 protein is structurally simple consisting of a coiled-coil and PHD (plant homeodomain) domain making it amenable for functional analysis. Using the differentiation assay, we demonstrated that PHF23's PHD domain in the fusion protein plays a key role in its oncogenic action. Additionally, we demonstrated in NIH-3T3 cells that NUP98-PHF23 has nuclear subcellular localization indicating a possible function within the nucleus similar to other NUP98 fusion genes. It is hypothesized that NUP98 fusion proteins function as aberrant transcription factors causing dysregulation in cellular development pathways. NUP98 fusion genes are associated with a poor prognosis. It is imperative to identify and functionally characterize these fusion genes as it could lead to the development of targeted, novel and more effective cancer therapeutics.