Secreted-frizzled related proteins (SFRPs) are modulators of the Wnt signaling pathway that is closely involved in normal and malignant hematopoiesis. Epigenetic deregulation of Wnt modulators leading to aberrant signaling has been reported in adult patients with acute myeloid leukemia (AML), but its occurrence in childhood patients with AML and the role of individual modulators are unclear. In this study, we examined SFRP1, SFRP2, SFRP4, and SFRP5 promoter methylation in 83 patients with AML (59 children and 24 adults) and found preferential SFRP1 methylation and mRNA down-regulation in the prognostically favorable subgroup of AML with t(8;21) translocation. Among the 4 genes, SFRP1 methylation independently predicted prolonged event-free and relapse-free survivals in childhood patients with nonacute promyelocytic leukemia with nonadverse cytogenetics. Mechanistically, we further demonstrated that RUNX1-ETO, the t(8;21) fusion product, specifically bound the SFRP1 promoter and repressed its transcription via a consensus RUNX binding site. In t(8;21)-leukemia cells, SFRP1 selectively inhibited canonical Wnt signaling and cellular proliferation that were associated with concomitant down-regulation of Wnt/β-catenin target genes, including CCND1 and MYC. Taken together, we identified SFRP1 as a transcriptional repression target of the t(8;21) fusion protein and demonstrated a novel mechanism of Wnt activation in a specific subtype of AML.