The fusion of TEL with platelet-derived growth factor receptor (PDGFR)  (TP) is found in a subset of patients with atypical myeloid neoplasms associated with eosinophilia and is the archetype of a larger group of hybrid receptors that are produced by rearrangements of PDGFR genes. TP is activated by oligomerization mediated by the pointed domain of TEL/ETV6, leading to constitutive activation of the PDGFR kinase domain. The receptor transmembrane (TM) domain is retained in TP and in most of the described PDGFR hybrids. Deletion of the TM domain (⌬TM-TP) strongly impaired the ability of TP to sustain growth factor-independent cell proliferation. We confirmed that TP resides in the cytosol, indicating that the PDGFR TM domain does not act as a transmembrane domain in the context of the hybrid receptor but has a completely different function. The ⌬TM-TP protein was expressed at a lower level because of increased degradation. It could form oligomers, was phosphorylated at a slightly higher level, co-immunoprecipitated with the p85 adaptor protein, but showed a much reduced capacity to activate STAT5 and ERK1/2 in Ba/F3 cells, compared with TP. In an in vitro kinase assay, ⌬TM-TP was more active than TP and less sensitive to imatinib, a PDGFR inhibitor. In conclusion, we show that the TM domain is required for TP-mediated signaling and proliferation, suggesting that the activation of the PDGFR kinase domain is not enough for cell transformation.