Acute lymphoblastic leukemia (ALL), a predominantly pediatric disease involving uncontrolled proliferation of white blood cells within the bone marrow, is strongly associated with chromosomal translocations. The human chromosomal translocation t(12;21)(p12;q22) is the most frequently encountered chromosomal rearrangement in pediatric B-lineage ALL, and results in fusion of the TEL and RUNX1 genes. The resulting TEL/RUNX1 fusion protein is generally thought to be a transcriptional repressor that interferes with RUNX1-mediated transactivation. We used a luciferase assay system to investigate the effects of TEL/RUNX1 and PEBP2β on RUNX1-mediated transactivation. TEL/RUNX1 blocked the synergistic transactivation achieved by PEBP2β and RUNX1, and coimmunoprecipitation and immunofluorescence analyses showed that PEBP2β interacted with TEL/RUNX1 and was sequestered in the cytoplasm. Theses results suggest that TEL/RUNX1 inhibits RUNX1-mediated transactivtion via cytoplasmic sequestration of coactivator(s) such as PEBP2β.