A cute myelogenous leukemias (AMLs) are genetically heterogeneous and characterized by chromosomal rearrangements that produce fusion proteins with aberrant transcriptional regulatory activities. Expression of AML fusion proteins in transgenic mice increases the risk of myeloid leukemias, suggesting that they induce a preleukemic state. The underlying molecular and biological mechanisms are, however, unknown. To address this issue, we performed a systematic analysis of fusion protein transcriptional targets. We expressed AML1/ETO, PML/RAR, and PLZF/RAR in U937 hemopoietic precursor cells and measured global gene expression using oligonucleotide chips. We identified 1,555 genes regulated concordantly by at least two fusion proteins that were further validated in patient samples and finally classified according to available functional information. Strikingly, we found that AML fusion proteins induce genes involved in the maintenance of the stem cell phenotype and repress DNA repair genes, mainly of the base excision repair pathway. Functional studies confirmed that ectopic expression of fusion proteins constitutively activates pathways leading to increased stem cell renewal (e.g., the Jagged1/Notch pathway) and provokes accumulation of DNA damage. We propose that expansion of the stem cell compartment and induction of a mutator phenotype are relevant features underlying the leukemic potential of AML-associated fusion proteins.