Large-scale chromosomal translocations are frequent oncogenic drivers in acute myeloid leukemia (AML). These translocations often occur in critical transcriptional/epigenetic regulators and contribute to malignant cell growth through alteration of normal gene expression. Despite this knowledge, the specific gene expression alterations that contribute to the development of leukemia remain incompletely understood. Here, through characterization of transcriptional regulation by the RUNX1-ETO fusion protein, we have identified Ras-association domain family member 2 (RASSF2) as a critical gene that is aberrantly transcriptionally repressed in t(8;21)-associated AML. Re-expression of RASSF2 specifically inhibits t(8;21) AML development in multiple models. Through biochemical and functional studies, we demonstrate RASSF2-mediated functions to be dependent on interaction with Hippo kinases, MST1 and MST2, but independent of canonical Hippo pathway signaling. Using proximity-based biotin labeling we define the RASSF2-proximal proteome in leukemia cells and reveal association with Rac GTPase-related proteins, including an interaction with the guanine nucleotide exchange factor, DOCK2. Importantly, RASSF2 knockdown impairs Rac GTPase activation, and RASSF2 expression is broadly correlated with Rac-mediated signal transduction in AML patients. Together, these data reveal a previously unappreciated mechanistic link between RASSF2, Hippo kinases, and Rac activity with potentially broad functional consequences in leukemia.