Constitutively activating mutations of FMS-like tyrosine kinase 3 (FLT3) occur in approximately one third of patients with acute myeloid leukemia (AML) and are associated with poor prognosis. Altered FLT3 signaling leads to antiapoptotic and proliferative signaling pathways. We recently showed that these mutations can also contribute to the differentiation arrest that characterizes leukemia. In this report we investigated the mechanism by which internal tandem duplication (ITD) mutation of FLT3 signaling blocks differentiation. Normally, myeloid differentiation requires the induction of CCAAT/enhancer-binding protein alpha (C/EBPalpha) and PU.1 expression. Expression of both genes was repressed by FLT3/ITD signaling in 32Dcl3 (32D) cells and this repression was overcome by treatment with a FLT3 inhibitor, allowing differentiation to proceed. We also observed increased expression of C/EBPalpha and PU.1 accompanied by signs of differentiation in 2 of 3 primary AML samples from patients with FLT3/ITD mutations receiving a FLT3 inhibitor, CEP-701, as part of a clinical trial. Forced expression of C/EBPalpha was also able to overcome FLT3/ITD-mediated differentiation block, further proving the importance of C/EBPalpha in this process.