The mechanisms by which AML1/ETO (A/E) fusion protein induces leukemogenesis in acute myeloid leukemia (AML) without mutagenic events remain elusive. Here we show that interactions between A/E and hypoxia-inducible factor 1α (HIF1α) are sufficient to prime leukemia cells for subsequent aggressive growth. In agreement with this, HIF1α is highly expressed in A/E-positive AML patients and strongly predicts inferior outcomes, regardless of gene mutations. Co-expression of A/E and HIF1α in leukemia cells causes a higher cell proliferation rate in vitro and more serious leukemic status in mice. Mechanistically, A/E and HIF1α form a positive regulatory circuit and cooperate to transactivate DNMT3a gene leading to DNA hypermethylation. Pharmacological or genetic interventions in the A/E-HIF1α loop results in DNA hypomethylation, a re-expression of hypermethylated tumor-suppressor p15(INK4b) and the blockage of leukemia growth. Thus high HIF1α expression serves as a reliable marker, which identifies patients with a poor prognosis in an otherwise prognostically favorable AML group and represents an innovative therapeutic target in high-risk A/E-driven leukemia.