Chronic myeloid leukemia (CML) is a stem cell (SC) neoplasm characterized by the BCR/ABL1 oncogene. Although mechanisms of BCR/ABL1-induced transformation are well-defined, little is known about effector-molecules contributing to malignant expansion and the extramedullary spread of leukemic SC (LSC) in CML. We have identified the cytokine-targeting surface enzyme dipeptidylpeptidase-IV (DPPIV/CD26) as a novel, specific and pathogenetically relevant biomarker of CD34+/CD38─ CML LSC. In functional assays, CD26 was identified as target enzyme disrupting the SDF-1-CXCR4-axis by cleaving SDF-1, a chemotaxin recruiting CXCR4+ SC. CD26 was not detected on normal SC or LSC in other hematopoietic malignancies. Correspondingly, CD26+ LSC decreased to low or undetectable levels during successful treatment with imatinib. CD26+ CML LSC engrafted NOD-SCID-IL-2Rγ−/− (NSG) mice with BCR/ABL1+ cells, whereas CD26─ SC from the same patients produced multilineage BCR/ABL1– engraftment. Finally, targeting of CD26 by gliptins suppressed the expansion of BCR/ABL1+ cells. Together, CD26 is a new biomarker and target of CML LSC. CD26 expression may explain the abnormal extramedullary spread of CML LSC, and inhibition of CD26 may revert abnormal LSC function and support curative treatment approaches in this malignancy. •DPPIV (CD26) is a new specific marker of CML LSC that aids CML diagnostics and the measurement, characterization, and purification of LSC.•DPPIV on CML LSC degrades SDF-1 and thereby promotes the niche-escape of LSC, which may contribute to extramedullary myeloproliferation in CML.