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The success of tyrosine kinase inhibitors (TKIs) in treating chronic myeloid leukemia (CML) depends on the requirement for BCR-ABL1 kinase activity in CML progenitors. However, CML quiescent HSCs are TKI resistant and represent a BCR-ABL1 kinase–independent disease reservoir. Here we have shown that persistence of leukemic HSCs in BM requires inhibition of the tumor suppressor protein phosphatase 2A (PP2A) and expression — but not activity — of the BCR-ABL1 oncogene. Examination of HSCs from CML patients and healthy individuals revealed that PP2A activity was suppressed in CML compared with normal HSCs. TKI-resistant CML quiescent HSCs showed increased levels of BCR-ABL1, but very low kinase activity. BCR-ABL1 expression, but not kinase function, was required for recruitment of JAK2, activation of a JAK2/β-catenin survival/self-renewal pathway, and inhibition of PP2A. PP2A-activating drugs (PADs) markedly reduced survival and self-renewal of CML quiescent HSCs, but not normal quiescent HSCs, through BCR-ABL1 kinase–independent and PP2A-mediated inhibition of JAK2 and β-catenin. This led to suppression of human leukemic, but not normal, HSC/progenitor survival in BM xenografts and interference with long-term maintenance of BCR-ABL1–positive HSCs in serial transplantation assays. Targeting the JAK2/PP2A/β-catenin network in quiescent HSCs with PADs (e.g., FTY720) has the potential to treat TKI-refractory CML and relieve lifelong patient dependence on TKIs.