Abstract In up to one-third of patients with acute myeloid leukemia, a C-terminal frame-shift mutation results in abnormal and abundant cytoplasmic accumulation of the usually nucleoli-bound protein nucleophosmin (NPM), and this is thought to function in cancer pathogenesis. Here, we demonstrate a gain-of-function role for cytoplasmic NPM in the inhibition of caspase signaling. The NPM mutant specifically inhibits the activities of the cell-death proteases, caspase-6 and -8, through direct interaction with their cleaved, active forms, but not the immature procaspases. The cytoplasmic NPM mutant not only affords protection from death ligand-induced cell death but also suppresses caspase-6/-8–mediated myeloid differentiation. Our data hence provide a potential explanation for the myeloid-specific involvement of cytoplasmic NPM in the leukemogenesis of a large subset of acute myeloid leukemia.