A chromosomal translocation found in cannibalistic acute myeloid leukemia (AML) leads to an in-frame fusion of the transcription elongation repressor ZMYND11 to MBTD1, a subunit of the NuA4/TIP60 histone acetyltransferase (HAT) complex. In contrast to the NuA4/TIP60 complex, ZMYND11 is linked to repression of actively transcribed genes through recognition of H3.3K36me3. To understand the abnormal molecular events that expression of this ZMYND11-MBTD1 fusion protein can create, we performed its biochemical and functional characterization in comparison to each individual fusion partner. ZMYND11-MBTD1 is stably incorporated into the endogenous NuA4/TIP60 complex but does not bring any additional interactors as the fusion lacks the MYND domain of ZMYND11. Nevertheless, this truncated ZMYND11 moiety in the fusion mostly leads to mislocalization of the NuA4/TIP60 complex on the body of genes normally bound by ZMYND11 in the genome. This can be correlated to increased chromatin acetylation and altered gene transcription, most notably on the MYC oncogene. Importantly, expression of ZMYND11-MBTD1, but not the individual fusion partners, during embryonic stem cell differentiation, leads to decreased expression of specific differentiation markers, while favoring Myc-driven pluripotency. Altogether, these results indicate that the ZMYND11-MBTD1 fusion protein functions primarily by mistargeting the NuA4/TIP60 complex to the body of genes, altering normal transcription of specific genes, likely driving oncogenesis in part through the Myc regulatory network.