The echinoderm microtubule-associated protein-like 4-anaplastic lymphoma kinase (EML4-ALK) fusion gene resulting from an inversion within chromosome 2p occurs in approximately 5% of non-small cell lung cancer and is mutually exclusive with Ras and EGFR mutations. In this study, we have used a potent and selective ALK small molecule inhibitor, NPV-TAE684, to assess the oncogenic role of EML4-ALK in non-small cell lung cancer (NSCLC). We show here that TAE684 inhibits proliferation and induces cell cycle arrest, apoptosis, and tumor regression in two NSCLC models that harbor EML4-ALK fusions. TAE684 inhibits EML4-ALK activation and its downstream signaling including ERK, AKT, and STAT3. We used microarray analysis to carry out targeted pathway studies of gene expression changes in H2228 NSCLC xenograft model after TAE684 treatment and identified a gene signature of EML4-ALK inhibition. The gene signature represents 1210 known human genes, and the top biologic processes represented by these genes are cell cycle, DNA synthesis, cell proliferation, and cell death. We also compared the effect of TAE684 with PF2341066, a c-Met and ALK small molecule inhibitor currently in clinical trial in cancers harboring ALK fusions, and demonstrated that TAE684 is a much more potent inhibitor of EML4-ALK. Our data demonstrate that EML4-ALK plays an important role in the pathogenesis of a subset of NSCLC and provides insight into the mechanism of EML4-ALK inhibition by a small molecule inhibitor.