Canonical Wnt signaling is critically involved in normal hematopoietic development and the self-renewal process of hematopoietic stem cells (HSCs). Deregulation of this pathway has been linked to a large variety of cancers, including different subtypes of leukemia. Lef-1 is a major transcription factor of this pathway and plays a pivotal role in lymphoid differentiation as well as in granulopoiesis. Here, we demonstrate Lef-1 expression in murine HSCs as well as its expression in human leukemia. Mice transplanted with bone marrow retrovirally transduced to express Lef-1 or a constitutive active Lef-1 mutant showed a severe disturbance of normal hematopoietic differentiation and finally developed B lymphoblastic and acute myeloid leukemia (AML). Lef-1-induced AMLs were characterized by immunoglobulin (Ig) DH-JH rearrangements and a promiscuous expression of lymphoid and myeloid regulatory factors. Furthermore, single cell experiments and limiting dilution transplantation assays demonstrated that Lef-1-induced AML was propagated by a leukemic stem cell with lymphoid characteristics displaying Ig DH-JH rearrangements and a B220(+) myeloid marker(-) immunophenotype. These data indicate a thus far unknown role of Lef-1 in the biology of acute leukemia, pointing to the necessity of balanced Lef-1 expression for an ordered hematopoietic development.