NPM/ALK is an oncogenic fusion protein expressed in approximately 50% of Anaplastic Large Cell Lymphoma (ALCL) cases. It derives from the t(2;5)(p23;q35) chromosomal translocation that fuses the catalytic domain of the tyrosine kinase, anaplastic lymphoma kinase (ALK), with the dimerization domain of the ubiquitously expressed nucleophosmin (NPM) protein. Dimerization of the ALK kinase domain leads to its autophosphorylation and constitutive activation. Activated NPM/ALK stimulates downstream survival and proliferation signaling pathways leading to malignant transformation. Here, we investigated the molecular mechanisms of autoactivation of the catalytic domain of ALK. Since kinases are typically regulated by autophosphorylation of their activation loops, we systematically mutated (Y  F) three potential autophosphorylation sites contained in the ‘Y-x-x-x-Y-Y’ motif of the ALK activation loop, and determined the effect of these mutations on the catalytic activity and biological function of NPM/ALK. We observed that mutation of both the second and third tyrosine residues (YFF mutant), did not affect the kinase activity or transforming ability of NPM/ALK. In contrast, mutation of the first and second (FFY), first and third (FYF), or all three (FFF) tyrosine residues impaired both kinase activity and transforming ability of NPM/ALK. Furthermore, a DFF mutant, in which the aspartic residue introduces a negative charge similar to a phosphorylated tyrosine, possessed catalytic activity similar to the YFF mutant. Together, our findings indicate that phosphorylation of the first tyrosine of the ‘Y-x-x-x-Y-Y’ motif is necessary for the autoactivation of the ALK kinase domain and the transforming activity of NPM/ALK.