Increasing evidence suggests that leukemias are sustained by leukemic stem cells. However, the molecular pathways underlying the transformation of normal cells into leukemic stem cells are still poorly understood. The involvement of a small group of key transcription factors into this process was suggested by their frequent mutation or down-regulation in patients with acute myeloid leukemia (AML). Recent findings in mice with hypomorphic transcription-factor genes demonstrated that leukemic stem-cell formation in AML could directly be caused by reduced transcription-factor activity beyond a critical threshold. Most interestingly, those experimental models and the paucity of biallelic null mutations or deletions in transcription-factor genes in patients suggest that AML is generally associated with graded down-regulation rather than complete disruption of transcription factors. Here, we discuss the effects of transcription-factor concentrations on hematopoiesis and leukemia, with a focus on the regulation of transcription-factor gene expression as a major mechanism that alters critical threshold levels during blood development and cancer.