Objective: To characterize a novel chronic myeloid leukemia (CML) cell line and to further elucidate the mechanisms of resistance to STI571. Methods: A novel K562 cell line (K562NP16) was achieved after exposure of the K562 cells to VP16. A small subpopulation (K562NP16 SP) that was capable of excluding Hoechst 33342 in the K562NP16 cell line was isolated by flow cytometry sorting. The rest of the K562NP16 cells were classified as non-SP K562NP16. The mechanisms involved in K562NP16 SP cells which became resistant to STI571 were studied. Results: The levels of Bcr-Abl and Abl proteins were similar in the K562 cell line and in non-SP K562NP16 and K562NP16 SP cells. The multidrug-resistant gene 1 (MDR1) expression of the 170 kDa P-glycoprotein (P-gp) was detected in K562NP16 non-SP and K562NP16 SP cells but not in K562 cells. The expression levels of P-gp in the two K562NP16 cell lines were similar. Compared with non-SP K562/VP16, the K562NP16 SP cells were more resistant to STI571. This resistance could hardly be reversed by many multidrug resistance inhibitors. In addition, in vivo study showed that the K562NP16 SP cells induced tumorigenesis in mice, while the K562NP16 non-SP cells failed to do so. Conclusion: A novel K562 cell line, K562NP16, was generated. A small side population K562NP16 SP cells, had high resistance to STI571 treatment and more tumorigenic than the K562 cells. It may represent the cancer stem cells of the K562NP16 cell line.