Tyrosine kinase (TK) fusions are frequently found in cancers, either as initiating events or as a mechanism of resistance to targeted therapy. Partner genes and exons in most TK fusions are typical and recurrent, but the underlying mechanisms and clinical implications of these patterns are poorly understood. Here, we investigated structures of > 8,000 kinase fusions and explore their generative mechanisms by applying newly developed experimental framework integrating high-throughput genome-wide gene fusion sequencing and clonal selection called Functionally Active Chromosomal Translocation Sequencing (FACTS). We discovered that typical oncogenic TK fusions recurrently seen in patients are selected from large pools of chromosomal rearrangements spontaneously occurring in cells based on two major determinants: active transcription of the fusion partner genes and protein stability. In contrast, atypical TK fusions that are rarely seen in patients showed reduced protein stability, decreased downstream oncogenic signaling, and were less responsive to inhibition. Consistently, patients with atypical TK fusions were associated with a reduced response to TKI therapies, as well as a shorter progression-free survival (PFS) and overall survival (OS) compared to patients with typical TK fusions. These findings highlight the principles of oncogenic TK fusion formation and their selection in cancers, with clinical implications for guiding targeted therapy.