Abstract Chromosome rearrangements involving the mixed-lineage leukemia gene (MLL) create MLL-fusion proteins, which could drive both acute lymphoblastic leukemia (ALL) and acute myeloid leukemia (AML). The lineage decision of MLL-fusion leukemia is influenced by the fusion partner and microenvironment. To investigate the interplay of fusion proteins and microenvironment in lineage choice, we transplanted human hematopoietic stem and progenitor cells (HSPCs) expressing MLL-AF9 or MLL-Af4 into immunodeficient NSGS mice, which strongly promote myeloid development. Cells expressing MLL-AF9 efficiently developed AML in NSGS mice. In contrast, MLL-Af4 cells, which were fully oncogenic under lymphoid conditions present in NSG mice, displayed compromised transformation capacity in a myeloid microenvironment. MLL-Af4 activated a self-renewal program in a lineage-dependent manner, showing the leukemogenic activity of MLL-Af4 was interlinked with lymphoid lineage commitment. The C-terminal homology domain (CHD) of Af4 was sufficient to confer this linkage. Although the MLL-CHD fusion protein failed to immortalize HSPCs in myeloid conditions in vitro, it could successfully induce ALL in NSG mice. Our data suggest that defective self-renewal ability and leukemogenesis of MLL-Af4 myeloid cells could contribute to the strong B-cell ALL association of MLL-AF4 leukemia observed in the clinic.