The AML1 gene is the most frequent target of translocations associated with human leukemias. We recently found somatic point mutations of the AML1 gene, V105ter and R139G, in two cases of myelodysplastic syndrome (MDS). Both mutations are present in the region encoding the Runt domain of AML1, and cause loss of the DNA-binding ability of the resultant products. Of these mutants, V105ter has also lost the ability to heterodimerize with PEBP2beta/CBFbeta. On the other hand, the R139G mutant acts as a dominant negative inhibitor through competing with wild-type AML1 for interaction with PEBP2beta/CBFbeta. In this review, we summarize mutational changes of the AML1 gene in hematological malignancies, especially in MDS and discuss the mechanism whereby the mutant acts as a dominant negative inhibitor of wild-type AML1.