Acute myeloid leukemia 1 (AML1) gene on chromosome 21 is involved in several chromosomal translocations, including t(8;21) and t(16;21), that produce chimeric fusion proteins AML1-eight twenty-one (ETO) and AML-myeloid transforming gene chromosome 16 (MTG16), which contribute to leukemogenesis. The molecular basis for the leukemogenic effects of these fusion proteins is incompletely understood. Using gel-shift assay, we showed that AML1-ETO and AML1-MTG16 bound to a series of AML1 consensus DNA-binding sites with different affinities. Using fluorescence recovery after photobleaching (FRAP), we demonstrated that a fusion of AML1 with ETO or MTG16 exhibits reduced intranuclear mobility compared with wild-type AML1 or either fusion partner. The dimerization domain (nervy homology region 2) of ETO is responsible for the reduced mobility of AML1-ETO. Dual FRAP studies revealed that CBFbeta colocalized with AML1-ETO within the nucleus, resulting in reduced mobility of CBFbeta. Therefore, AML1 fusion proteins may interfere with normal AML1 function due to aberrant nuclear dynamics, which leads to spatial and temporal sequestration of CBFbeta and perhaps other coregulators critical for myeloid differentiation.