The bone marrow microenvironment (BMM) provides a protective niche that supports growth and survival of normal and leukemic hematopoietic stem cells. The SDF-1/CXCR4 interaction is critical for regulation of homing to and retention of hematopoietic cells in the bone marrow (BM), which leads to increased chemoresistance. SDF-1/CXCR4 plays pivotal roles in cross-interactions between blasts and the BMM to prevent retention and mobilization of leukemic cells, as well as in normal hematopoiesis including the development of immune cells. We show that the CXCR4 antagonist, plerixafor, decreased the level of CXCR4 expression and inhibited SDF-1-induced migration of leukemic cells. Further, the inhibition of the interaction between leukemic cells and the BMM by the plerixafor enhanced cytotoxic activity of immune cells as a result of increased susceptibility of leukemic cells to chemotherapeutic agents such as cytosine arabinoside (Ara-C) in a mouse model of acute myeloid leukemia (AML), suggesting biological effects of the BMM through immune cell activation. Because alterations in the BMM promote retention and survival of leukemic cells, targeting the niche is regarded as an advanced strategy to eradicate drug-resistant leukemic blasts. This study demonstrates that the effects of CXCR4 inhibition on blast suppression and immune cell function in the tumor microenvironment and chemotherapy with plerixafor represents an advanced therapeutic strategy of targeting the leukemic niche.