Tyrosine kinase BCR-ABL1 is the underlying cause of chronic myeloid leukemia (CML). Current treatments for CML patients rely on ATP-competitive tyrosine kinase inhibitors (TKIs). Over the course of treatment, 20−30% of patients manifest drug resistance associated with point mutations within the drug-binding site of BCR-ABL1. We developed a strategy to overcome drug resistance by targeting the substrate-binding site of BCR-ABL1 with a new class of peptide inhibitors incorporating sequences derived from abltide, the optimal substrate of Abl kinase, onto a cell-penetrating cyclotide MCoTI-II. Three grafted cyclotides show significant Abl kinase inhibition in vitro in the low micromolar range using a novel kinase inhibition assay. Our work also demonstrates that a reengineered MCoTI-II with abltide sequences grafted in both loop 1 and 6 inhibits the activity of [T315I]Abl in vitro, a mutant Abl kinase harboring the “gatekeeper” mutation which is notorious for being multidrug resistant. The serum stability and cell internalization studies confirmed that the cyclotide scaffold provides enzymatic stability and cell-penetrating properties to the lead molecule. Taken together, our study highlights that reengineered cyclotides incorporating abltide-derived sequences are promising substrate-competitive inhibitors for Abl kinase and its T315I mutant and could potentially be developed as a new treatment for CML.