Faithful modeling of mixed-lineage leukemia in murine cells has been difficult to achieve. We show that expression of MLL-AF9 in human CD34+ cells induces acute myeloid, lymphoid, or mixed-lineage leukemia in immunodeficient mice. Some leukemia stem cells (LSC) were multipotent and could be lineage directed by altering either the growth factors or the recipient strain of mouse, highlighting the importance of microenvironmental cues. Other LSC were strictly lineage committed, demonstrating the heterogeneity of the stem cell compartment in MLL disease. Targeting the Rac signaling pathway by pharmacologic or genetic means resulted in rapid and specific apoptosis of MLL-AF9 cells, suggesting that the Rac signaling pathway may be a valid therapeutic target in MLL-rearranged AML.