The RUNX family genes are the mammalian homologs of the Drosophila genes runt and lozenge, and members of this family function as master regulators of definitive hematopoiesis and osteogenesis. The RUNX genes encode the α subunit of the transcription factor PEBP2/CBF. The β subunit consists of the non‐RUNX protein PEBP2β. We found that RUNX1/AML1, which is essential for hematopoiesis, is continuously subjected to proteolytic degradation mediated by the ubiquitin–proteasome pathway. When PEBP2β is present, however, the ubiquitylation of RUNX1 is abrogated and this causes a dramatic inhibition of RUNX1 proteolysis. Heterodimerization between PEBP2β and RUNX1 thus appears to be an essential step in the generation of transcriptionally competent RUNX1. Consistent with this notion, RUNX1 was barely detected in PEBP2β−/− mouse. CBF (PEBP2) β–SMMHC, the chimeric protein associated with inv (16) acute myeloid leukemia, was found to protect RUNX1 from proteolytic degradation more efficiently than PEBP2β. These results reveal a hitherto unknown and major role of PEBP2β, namely that it regulates RUNX1 by controlling its turnover. This has allowed us to gain new insights into the mechanism of leukemogenesis by CBFβ–SMMHC.