Glucocorticoids are fundamental drugs used in the treatment of lymphoid malignancies with apoptotic cell death as the hitherto proposed mechanism of action. Recent studies, however, showed that an alternative mode of cell death, autophagy, is involved in the response to anticancer drugs. The specific role of autophagy and its relationship to apoptosis remains, nevertheless, controversial: it can either lead to cell survival or can function in cell death. We show that dexamethasone induced autophagy upstream of apoptosis in acute lymphoblastic leukemia cells. Inhibition of autophagy by siRNA-mediated repression of Beclin 1 expression inhibited apoptosis showing an important role of autophagy in dexamethasone-induced cell death. Dexamethasone treatment caused an upregulation of promyelocytic leukemia protein, PML, its complex formation with protein kinase B or Akt and a PML-dependent Akt dephosphorylation. Initiation of autophagy and the onset of apoptosis were both dependent on these events. PML knockout thymocytes were resistant to dexamethasone-induced death and upregulation of PML correlated with the ability of dexamethasone to kill primary leukemic cells. Our data reveal key mechanisms of dexamethasone-induced cell death that may inform the development of improved treatment protocols for lymphoid malignancies.