This invention discloses a novel stable crystal form of imatinib mesylate, designated by us as α2 Form, which is stable at room temperature and even at higher temperatures up to 120° C. and accelerated stress conditions and, freely soluble in water. This invention also discloses a pharmaceutical composition containing the novel stable α2 form of Imatinib mesylate and other usually employed excipients, useful in the treatment of Chronic Myelogenous Leukemia (CML). This new α2 Form of imatinib mesylate is prepared by slurrying Imatinib base in isopropanol at room temperature followed by addition of methane sulfonic acid and maintaining 50-60 ° C. followed by filtration. This invention also discloses another process for the preparation of the novel, stable α2 crystalline form of Imatinib Mesylate by the conversion of Imatinib mesylate β-polymorphic modification by suspending it in water and organic solvents, distilling off water azeotropically, cooling and filtering to obtain the α2 crystal form.