Runx1 is a key hematopoietic transcription factor required for definitive hematopoiesis and is a frequent target of leukemia-related chromosomal translocations. The resulting fusion proteins, while retaining DNA binding activity, display loss of subnuclear targeting and associated transactivation functions encoded by the C-terminus of the protein. To define the precise contribution of the Runx1 C-terminus in development and leukemia, we created a knock-in mouse with a C-terminal truncation by introducing a single nucleic acid substitution in the native Runx1 locus. This mutation (Runx1Q307X) models genetic lesions observed in patients with leukemia and myeloproliferative disorders. The Runx1Q307X homozygous mouse exhibits embryonic lethality at E12.5 due to central nervous system hemorrhages and a complete lack of hematopoietic stem cell function. While able to bind DNA, Runx1Q307X is unable to activate target genes, resulting in deregulation of various hematopoietic markers. Thus, we demonstrate that the subnuclear targeting and transcriptional regulatory activities of the Runx1 C-terminus are critical for hematopoietic development. We propose that compromising the C-terminal functions of Runx1 is a common mechanism for the pathological consequences of a variety of somatic mutations and Runx1-related leukemic fusion proteins observed in human patients. © The Author 2009. Published by Oxford University Press. All rights reserved. For Permissions, please email: email@example.com.