The transcription factor STAT5 is an essential downstream mediator of many tyrosine kinases (TKs), particularly in hematopoietic cancers. STAT5 is activated by FLT3-ITD, which is a constitutively active TK driving the pathogenesis of acute myeloid leukemia (AML). Since STAT5 is a critical mediator of diverse malignant properties of AML cells, direct targeting of STAT5 is of significant clinical value. Here, we describe the development and preclinical evaluation of a novel, potent STAT5 SH2 domain inhibitor, AC-4-130, which can efficiently block pathological levels of STAT5 activity in AML. AC-4-130 directly binds to STAT5 and disrupts STAT5 activation, dimerization, nuclear translocation, and STAT5-dependent gene transcription. Notably, AC-4-130 substantially impaired the proliferation and clonogenic growth of human AML cell lines and primary FLT3-ITD+ AML patient cells in vitro and in vivo. Furthermore, AC-4-130 synergistically increased the cytotoxicity of the JAK1/2 inhibitor Ruxolitinib and the p300/pCAF inhibitor Garcinol. Overall, the synergistic effects of AC-4-130 with TK inhibitors (TKIs) as well as emerging treatment strategies provide new therapeutic opportunities for leukemia and potentially other cancers.