Activating fetal liver tyrosine kinase 3 (Flt3) mutations represent the most common genetic aberrations in acute myeloid leukemia (AML). Most commonly, they occur as internal tandem duplications in the juxtamembrane domain (Flt3-ITD) that transform myeloid cells in vitro and in vivo and that induce aberrant signaling and biologic functions. We identified RGS2, a regulator of G-protein signaling, as a gene specifically repressed by Flt3-ITD. Here we demonstrate an important role of RGS2 in Flt3-ITD-mediated transformation. RGS2 was repressed after forced expression of activating Flt3 mutations in 2 myeloid cell lines (32Dcl3 and NB4). Furthermore, RGS2 was repressed in Flt3-mutation-positive AML cases in comparison to Flt3-mutation-negative cases, especially in Flt3-ITD-positive cases with a high ITD-to-wild-type (WT) ratio. Coexpression of RGS2 with Flt3-ITD inhibited Flt3-ITD-induced autonomous proliferation and clonal growth of 32D cells. RGS2 also inhibited Flt3-ITD-induced phosphorylation of Akt and glycogen synthase kinase beta (Gsk3-beta) without influencing signal transducer and activator of transcription 5 (STAT5) activation. In addition, RGS2 reinduced the expression of Flt3-ITD-repressed CCAAT/enhancer-binding protein alpha (c/EBPalpha) and antagonized the Flt3-ITD-induced differentiation block in 32D cells. Expression analyses in myeloid cell lines revealed induction of RGS2 during granulocytic but not during monocytic differentiation. Taken together, RGS2 is a novel mediator of myeloid differentiation, and its repression is an important event in Flt3-ITD-induced transformation.