Recent studies suggest that the chromosome 16 inversion, associated with acute myeloid leukemia M4Eo, takes place in hematopoietic stem cells. If this is the case, it is of interest to know the effects of the resulting fusion gene, CBFB-MYH11, on other lineages. Here we studied T-cell development in mice expressing Cbfb-MYH11 and compared them with mice compound-heterozygous for a Cbfb null and a hypomorphic GFP knock-in allele (Cbfb(-/GFP)), which had severe Cbfb deficiency. We found a differentiation block at the DN1 stage of thymocyte development in Cbfb-MYH11 knock-in chimeras. In a conditional knock-in model in which Cbfb-MYH11 expression was activated by Lck-Cre, there was a 10-fold reduction in thymocyte numbers in adult thymus, resulting mainly from impaired survival of CD4+CD8+ thymocytes. Although Cbfb-MYH11 derepressed CD4 expression efficiently in reporter assays, such derepression was less pronounced in vivo. On the other hand, CD4 expression was derepressed and thymocyte development was blocked at DN1 and DN2 stages in E17.5 Cbfb(-/GFP) thymus, with a 20-fold reduction of total thymocyte numbers. Our data suggest that Cbfb-MYH11 suppressed Cbfb in several stages of T-cell development and provide a mechanism for CBFB-MYH11 association with myeloid but not lymphoid leukemia.