Anaplastic Lymphoma Kinase (ALK) is a receptor tyrosine kinase aberrantly expressed in a variety of tumor types, most notably in Anaplastic Large Cell Lymphoma (ALCL) where a chromosomal translocation generates the oncogenic fusion protein, Nucleophosmin-ALK (NPM-ALK). Whilst much is known regarding the mechanism of transformation by NPM-ALK, the existence of cellular defence pathways to prevent this pathological process has not been investigated. Employing the highly tractable primary murine embryonic fibroblast (MEF) system we show that cellular transformation is not an inevitable consequence of NPM-ALK activity but is combated by p53 and Rb. Activation of p53 and/or Rb by NPM-ALK triggers a potent proliferative block with features reminiscent of senescence. While loss of p53 alone is sufficient to circumvent NPM-ALK-induced senescence and permit cellular transformation, sole loss of Rb permits continued proliferation but not transformation due to p53-imposed restraints. Furthermore, NPM-ALK attenuates p53 activity in an Rb and MDM2 dependent manner but this activity is not sufficient to bypass senescence. These data indicate that senescence may constitute an effective barrier to ALK-induced malignancies that ultimately must be overcome for tumor development.