The acute myelogenous leukemia–1 (AML1)–ETO fusion protein is generated by the t(8;21), which is found in 40% of AMLs of the French-American-British M2 subtype. AML1-ETO interferes with the function of the AML1 (RUNX1, CBFA2) transcription factor in a dominant-negative fashion and represses transcription by binding its consensus DNA–binding site and via protein-protein interactions with other transcription factors. AML1 activity is critical for the development of definitive hematopoiesis, and haploinsufficiency of AML1 has been linked to a propensity to develop AML. Murine experiments suggest that AML1-ETO expression may not be sufficient for leukemogenesis; however, like the BCR-ABL isoforms, the cellular background in which these fusion proteins are expressed may be critical to the phenotype observed. Retroviral gene transfer was used to examine the effect of AML1-ETO on the in vitro behavior of human hematopoietic stem and progenitor cells. Following transduction of CD34⁺ cells, stem and progenitor cells were quantified in clonogenic assays, cytokine-driven expansion cultures, and long-term stromal cocultures. Expression of AML1-ETO inhibited colony formation by committed progenitors, but enhanced the growth of stem cells (cobblestone area-forming cells), resulting in a profound survival advantage of transduced over nontransduced cells. AML1-ETO–expressing cells retained progenitor activity and continued to express CD34 throughout the 5-week long-term culture. Thus, AML1-ETO enhances the self-renewal of pluripotent stem cells, the physiological target of many acute myeloid leukemias.