An increasing number of chromosomal aberrations is being identified in solid tumors providing novel biomarkers for various types of cancer and new insights into the mechanisms of carcinogenesis. We applied next generation sequencing technique to analyze the transcriptome of the non-small cell lung carcinoma (NSCLC) cell line H2228 and discovered a fusion transcript composed of multiple exons of ALK (anaplastic lymphoma receptor tyrosine kinase) and PTPN3 (protein tyrosine phosphatase, nonreceptor Type 3). Detailed analysis of the genomic structure revealed that a portion of genomic region encompassing Exons 10 and 11 of ALK has been translocated into the intronic region between Exons 2 and 3 of PTPN3. The key net result appears to be the null mutation of one allele of PTPN3, a gene with tumor suppressor activity. Consistently, ectopic expression of PTPN3 in NSCLC cell lines led to inhibition of colony formation. Our study confirms the utility of next generation sequencing as a tool for the discovery of somatic mutations and has led to the identification of a novel mutation in NSCLC that may be of diagnostic, prognostic, and therapeutic importance. © 2012 Wiley Periodicals, Inc.