AbstractGene fusions are known to drive many human cancers. Therefore, the functional characterization of newly discovered fusions is critical to understanding the oncobiology of these tumors and to enable therapeutic development. NPM1–TYK2 is a novel fusion identified in CD30 + lymphoproliferative disorders, and here we present the functional evaluation of this fusion gene as an oncogene. The chimeric protein consists of the amino-terminus of nucleophosmin 1 (NPM1) and the carboxyl-terminus of tyrosine kinase 2 (TYK2), including the kinase domain. Using in vitro lymphoid cell transformation assays and in vivo tumorigenic xenograft models we present direct evidence that the fusion gene is an oncogene. NPM1 fusion partner provides the critical homodimerization needed for the fusion kinase constitutive activation and downstream signaling that are responsible for cell transformation. As a result, our studies identify NPM1–TYK2 as a novel fusion oncogene and suggest that inhibition of fusion homodimerization could be a precision therapeutic approach in cutaneous T-cell lymphoma patients expressing this chimera.