The kinase activity of the BCR-ABL gene product is known to be down-regulated in K562 cells treated with low concentrations of the phorbol ester 12-O-tetradecanoylphorbol-13-acetate (TPA). The reduction of BCR-ABL kinase activity is followed by the loss of cell proliferation and progression to a more differentiated state. We have previously demonstrated that K562 cells possess protein complexes that contain p210 BCR-ABL and p160 BCR (M. L. Campbell, W. J. Li, and R. B. Arlinghaus, Oncogene, 5: 773-776, 1990). We performed experiments to determine whether BCR-ABL/BCR complexes were disrupted prior to alterations in cell growth and differentiation effects in TPA-treated K562 cells. Our results indicate that BCR-ABL/BCR complexes disappeared at precisely the same time after TPA treatment as the loss of autophosphorylation activity exhibited by total p210 BCR-ABL, which occurred 16-19 h after TPA treatment. The loss of kinase activity preceded the loss of p210 BCR by more than 24 h. A degraded form of p210 BCR-ABL (about 175 kilodaltons) accounted for the residual autophosphorylation activity seen during the later phases of kinase inactivation following TPA treatment, and this form was preferentially sequestered within BCR-ABL/BCR complexes. This altered BCR-ABL protein, although able to autophosphorylate, had reduced ability to phosphorylate p160 BCR. We conclude that 15 nm TPA treatment of K562 cells initiates effects that simultaneously interfere with the phosphorylation of p160 BCR in BCR-ABL complexes and inactivates the autophosphorylation activity of the full length BCR-ABL protein. These findings are consistent with the hypothesis that phosphorylation of p160 BCR by BCR-ABL plays a significant role in maintaining the leukemic state of chronic myelogenous leukemia cells.