Active BCR related (ABR) gene deactivates ras-related C3 botulinum toxin substrate 1 (RAC1), which plays an essential role in regulating normal hematopoiesis and in leukemia. BCR gene, closely related to ABR, acts as a tumor suppressor in chronic myeloid leukemia and has overlapping functions with ABR. Our results show downregulation of ABR in AML. A block of ABR prevents myeloid differentiation and leads to repression of C/EBPα, a major regulator of myeloid differentiation and functionally impaired in leukemia. Conversely, stable overexpression of ABR enhances myeloid differentiation. Inactivation of the known ABR target RAC1 by RAC1 inhibitor NSC23766 resulted in an increased expression of C/EBPα. Finally, AML patients with high ABR expression at diagnosis showed a significant longer overall survival and patients who respond to azacitidine therapy showed a significant higher ABR expression. This is the first report showing that ABR expression plays a critical role in both myelopoiesis and AML. Our data indicate the tumor suppressor potential of ABR and underline its potential role in leukemia therapeutic strategies.