The pathways by which oncogenes, such as MLL-AF9, initiate transformation and leukemia in humans and mice are incompletely defined. In a study of target cells and oncogene dosage, we found that Mll-AF9, when under endogenous regulatory control, efficiently transformed LSK (Lin-Sca1+c-kit+) stem cells, while committed granulocyte-monocyte progenitors (GMPs) were transformation resistant and did not cause leukemia. Mll-AF9 was expressed at higher levels in hematopoietic stem (HSC) than GMP cells. Mll-AF9 gene dosage effects were directly shown in experiments where GMPs were efficiently transformed by the high dosage of Mll-AF9 resulting from retroviral transduction. Mll-AF9 upregulated expression of 192 genes in both LSK and progenitor cells, but to higher levels in LSKs than in committed myeloid progenitors.