Bromo and extra terminal (BET) proteins (BRD2, BRD3, BRD4 and BRDT) are transcriptional regulators required for efficient expression of several growth promoting and anti-apoptotic genes as well as for cell cycle progression. BET proteins are recruited to transcriptionally active chromatin via their two N-terminal bromodomains (BRDs), a protein interaction module that specifically recognizes acetylated lysine residues in histones H3 and H4. Inhibition of the BET-histone interaction results in transcriptional down-regulation of a number of oncogenes providing a novel pharmacological strategy for the treatment of cancer. Here we present a potent and highly selective dihydroquinazoline-2-one inhibitor, PFI-1 that efficiently blocks the interaction of BET BRDs with acetylated histone tails. Co-crystal structures showed that PFI-1 acts as an acetyl-lysine (Kac) mimetic inhibitor efficiently occupying the Kac binding site in BRD4 and BRD2. PFI-1 has antiproliferative effects on leukaemic cell lines and efficiently abrogates their clonogenic growth. Exposure of sensitive cell lines with PFI-1 results in G1 cell cycle arrest, down-regulation of MYC expression as well as induction of apoptosis and induces differentiation of primary leukaemic blasts. Intriguingly, cells exposed to PFI-1 showed significant down-regulation of Aurora B kinase, thus attenuating phosphorylation of the Aurora substrate H3S10 providing an alternative strategy for the specific inhibition of this well established oncology target.