EZH2, a catalytic component of the polycomb repressive complex 2, trimethylates histone H3 at lysine 27 (H3K27) to repress the transcription of target genes. Although EZH2 is overexpressed in various cancers, including some hematologic malignancies, the role of EZH2 in acute myeloid leukemia (AML) has yet to be examined in vivo. In the present study, we transformed granulocyte macrophage progenitors from Cre-ERT;Ezh2^flox/flox mice with the MLL-AF9 leukemic fusion gene to analyze the function of Ezh2 in AML. Deletion of Ezh2 in transformed granulocyte macrophage progenitors compromised growth severely in vitro and attenuated the progression of AML significantly in vivo. Ezh2-deficient leukemic cells developed into a chronic myelomonocytic leukemia–like disease with a lower frequency of leukemia-initiating cells compared with the control. Chromatin immunoprecipitation followed by sequencing revealed a significant reduction in the levels of trimethylation at H3K27 in Ezh2-deficient leukemic cells, not only at Cdkn2a, a known major target of Ezh2, but also at a cohort of genes relevant to the developmental and differentiation processes. Overexpression of Egr1, one of the derepressed genes in Ezh2-deficient leukemic cells, promoted the differentiation of AML cells profoundly. Our findings suggest that Ezh2 inhibits differentiation programs in leukemic stem cells, thereby augmenting their leukemogenic activity.