Chronic myeloid leukemia (CML) stem cells appear resistant to tyrosine kinase inhibitors (TKIs) in vitro, but their impact and drug sensitivity in vivo has not been systematically assessed. We prospectively analyzed the proportion of Philadelphia chromosome-positive leukemic stem cells (LSCs, Ph+CD34+CD38-) and progenitor cells (LPCs, Ph+CD34+CD38+) from 46 newly diagnosed CML patients both at the diagnosis and during imatinib or dasatinib therapy (ClinicalTrials.gov NCT00852566). At diagnosis, the proportion of LSCs varied markedly (1-100%) between individual patients with a significantly lower median value as compared with LPCs (79% vs 96%, respectively, P=0.0001). The LSC burden correlated with leukocyte count, spleen size, hemoglobin and blast percentage. A low initial LSC percentage was associated with less therapy-related hematological toxicity and superior cytogenetic and molecular responses. After initiation of TKI therapy, the LPCs and LSCs rapidly decreased in both therapy groups, but at 3 months time point the median LPC level was significantly lower in dasatinib group compared with imatinib patients (0.05% vs 0.68%, P=0.032). These data detail for the first time the prognostic significance of the LSC burden at diagnosis and show that in contrast to in vitro data, TKI therapy rapidly eradicates the majority of LSCs in patients.