Overexpression of wild-type MN1 is a negative prognostic factor in patients with acute myeloid leukemia (AML) with normal cytogenetics. We evaluated whether MN1 plays a functional role in leukemogenesis. We demonstrate using retroviral gene transfer and bone marrow (BM) transplantation that MN1 overexpression rapidly induces lethal AML in mice. Insertional mutagenesis and chromosomal instability were ruled out as secondary aberrations. MN1 increased resistance to all-trans retinoic acid (ATRA)–induced cell-cycle arrest and differentiation by more than 3000-fold in vitro. The differentiation block could be released by fusion of a transcriptional activator (VP16) to MN1 without affecting the ability to immortalize BM cells, suggesting that MN1 blocks differentiation by transcriptional repression. We then evaluated whether MN1 expression levels in patients with AML (excluding M3-AML) correlated with resistance to ATRA treatment in elderly patients uniformly treated within treatment protocol AMLHD98-B. Strikingly, patients with low MN1 expression who received ATRA had a significantly prolonged event-free (P = .008) and overall (P = .04) survival compared with patients with either low MN1 expression and no ATRA, or high MN1 expression with or without ATRA. MN1 is a unique oncogene in hematopoiesis that both promotes proliferation/self-renewal and blocks differentiation, and may become useful as a predictive marker in AML treatment.