Development of kinase domain mutations is a major drug-resistance mechanism for tyrosine kinase inhibitors (TKIs) in cancer therapy. A particularly challenging example is found in Philadelphia chromosome-positive chronic myelogenous leukemia (CML) where all available kinase inhibitors in clinic are ineffective against the BCR-ABL mutant, T315I. As an alternative approach to kinase inhibition, an orally administered heat shock protein 90 (Hsp90) inhibitor, IPI-504, was evaluated in a murine model of CML. Treatment with IPI-504 resulted in BCR-ABL protein degradation, decreased numbers of leukemia stem cells, and prolonged survival of leukemic mice bearing the T315I mutation. Hsp90 inhibition more potently suppressed T315I-expressing leukemia clones relative to the wild-type (WT) clones in mice. Combination treatment with IPI-504 and imatinib was more effective than either treatment alone in prolonging survival of mice simultaneously bearing both WT and T315I leukemic cells. These results provide a rationale for use of an Hsp90 inhibitor as a first-line treatment in CML by inhibiting leukemia stem cells and preventing the emergence of imatinib-resistant clones in patients. Rather than inhibiting kinase activity, elimination of mutant kinases provides a new therapeutic strategy for treating BCR-ABL-induced leukemia as well as other cancers resistant to treatment with tyrosine kinase inhibitors.