The t(12;21)(p13;q22) translocation generates the TEL-AML1 (TEL, translocation-Ets-leukemia; AML1, acute myeloid leukemia-1) (ETV6-RUNX1) fusion product and is the most common chromosomal abnormality in pediatric leukemia. Our previous studies using a murine fetal liver transplantation model demonstrated that TEL-AML1 promotes the self-renewal of B-cell precursors in vitro and enhances the expansion of hematopoietic stem cells (HSCs) in vivo. This is consistent with the hypothesis that TEL-AML1 induces expansion of a preleukemic clone. Several studies have described domains within TEL-AML1 involved in the transcriptional regulation of specific target genes. However, it is unclear which of these domains is important for the activity of TEL-AML1 in preleukemic hematopoiesis. In order to examine this, we have generated a panel of deletion mutants and expressed them in HSCs. These experiments demonstrate that TEL-AML1 requires multiple domains from both TEL and AML1 to alter hematopoiesis. Furthermore, mutation of a single amino-acid residue within the runt homology domain of AML1, required for DNA binding, was sufficient to abrogate TEL-AML1 activity. These data suggest that TEL-AML1 acts as an aberrant transcription factor to perturb multiple pathways during hematopoiesis.