The mixed lineage leukemia (MLL) protein is an epigenetic transcriptional regulator that controls proliferative expansion of immature hematopoietic progenitors, whose aberrant activation triggers leukemogenesis. A mature MLL protein is produced by formation of an intra-molecular complex and proteolytic cleavage. However the biological significance of these two post-transcriptional events remains unclear. To address their in vivo roles, mouse mutant alleles were created that exclusively express either a variant protein incapable of intra-molecular interaction (designated de) or an uncleavable mutant protein (designated uc). The de homozygous mice died during midgestation and manifested devastating failure in embryonic development and reduced numbers of hematopoietic progenitors, whereas uc homozygous mice displayed no apparent defects. Expression of MLL target genes was severely impaired in de homozygous fibroblasts but unaffected in uc homozygous fibroblasts. These results unequivocally demonstrate that intra-molecular complex formation is a crucial maturation step whereas proteolytic cleavage is dispensable for MLL-dependent gene activation and proliferation in vivo.