CD37 has gathered renewed interest as a therapeutic target in non-Hodgkin lymphoma (NHL) and chronic lymphocytic leukemia (CLL); however, CD37-directed antibody-drug conjugates (ADCs) have not been explored. Here, we identified a novel anti-CD37 antibody, K7153A, with potent in vitro activity against B-cell lines through multiple mechanisms including apoptosis induction, antibody-dependent cellular cytotoxicity, antibody-dependent cellular phagocytosis, and complement-dependent cytotoxicity. The antibody was conjugated to the maytansinoid, DM1, a potent antimicrotubule agent, via the thioether linker, N-succinimidyl-4-(N-maleimidomethyl)cyclohexane-1-carboxylate (SMCC), and the resulting ADC, IMGN529, retained the intrinsic antibody activities and showed enhanced cytotoxic activity from targeted payload delivery. In lymphoma cell lines, IMGN529 induced G₂/M cell cycle arrest after internalization and lysosomal processing to lysine-N^ε-SMCC-DM1 as the sole intracellular maytansinoid metabolite. IMGN529 was highly active against subcutaneous B-cell tumor xenografts in severe combined immunodeficient mice with comparable or better activity than rituximab, a combination of cyclophosphamide, vincristine, and prednisone, or bendamustine. In human blood cells, CD37 is expressed in B cells at similar levels as CD20, and IMGN529 resulted in potent and specific depletion of normal and CLL B cells. These results support evaluation of the CD37-targeted ADC, IMGN529, in clinical trials in patients with B-cell malignancies including NHL and CLL.