Epigenetic regulators play a critical role in normal and malignant hematopoiesis. Deregulation, including epigenetic deregulation, of the gene cluster drives transformation of about 50% of acute myeloid leukemia. We recently showed that the Histone 3 Lysine 9 methyltransferase SETDB1 negatively regulates the expression of the pro-leukemic genes and its cofactor through deposition of promoter H3K9 trimethylation in MLL-AF9 leukemia cells. Here, we investigated the biological impact of altered SETDB1 expression and changes in H3K9 methylation on acute myeloid leukemia. We demonstrate that expression is correlated to disease status and overall survival in acute myeloid leukemia patients. We recapitulated these findings in mice, where high expression of SETDB1 delayed MLL-AF9 mediated disease progression by promoting differentiation of leukemia cells. We also explored the biological impact of treating normal and malignant hematopoietic cells with an H3K9 methyltransferase inhibitor, UNC0638. While myeloid leukemia cells demonstrate cytotoxicity to UNC0638 treatment, normal bone marrow cells exhibit an expansion of cKit+ hematopoietic stem and progenitor cells. Consistent with these data, we show that bone marrow treated with UNC0638 is more amenable to transformation by MLL-AF9. Next generation sequencing of leukemia cells shows that high expression of SETDB1 induces repressive changes to the promoter epigenome and downregulation of genes linked with acute myeloid leukemia, including and the MLL-AF9 target genes , , and others. These data reveal novel targets of SETDB1 in leukemia that point to a role for SETDB1 in negatively regulating pro-leukemic target genes and suppressing acute myeloid leukemia.