Inv(16)(p13q22) is associated with acute myeloid leukemia subtype M4Eo that is characterized by the presence of myelomonocytic blasts and atypical eosinophils. This chromosomal rearrangement results in the fusion of CBFB and MYH11 genes. CBF beta normally interacts with RUNX1 to form a transcriptionally active nuclear complex. The MYH11 gene encodes the smooth muscle myosin heavy chain. The CBF beta-SMMHC fusion protein is capable of binding to RUNX1 and form dimers and multimers through its myosin tail. Previous results from transgenic mouse models show that Cbfb-MYH11 is able to inhibit dominantly Runx1 function in hematopoiesis, and is a key player in the pathogenesis of leukemia. In recent years, molecular and cellular biological studies have led to the proposal of several models to explain the function of CBF beta-SMMHC. In this review, we will first focus our attention on the molecular mechanisms proposed in the recent publications. We will next examine recent gene expression profiling studies on inv(16) leukemia cells. Finally, we will describe a recent study from one of our labs on the identification of cooperating genes for leukemogenesis with CBFB-MYH11.