Ikaros (IK) malfunction has been implicated in the pathogenesis of acute lymphoblastic leukemia (ALL), the most common form of childhood cancer. Therefore, a stringent regulation of IK activity is very important. Here we provide unique genetic and biochemical evidence that the Ku protein components Ku70 and Ku80 act as positive regulators of IK function via formation of IK-Ku70 and IK-Ku80 heterodimers with augmented sequence-specific DNA binding activity. siRNA-mediated depletion of Ku70 or Ku80 reduced the sequence-specific DNA binding activity of IK in EMSA as well as the RT-PCR measured IK target gene expression levels in human cells. The interaction of Ku components with IK likely contributes to the anti-leukemic effects of IK as a tumor suppressor, because Ku70 as well as Ku80 haploinsuffiency in mice caused development of a lymphoproliferative disorder (LPD) involving CD2+CD4+CD8+CD1+IL7R+ thymic T-cell precursors with functional IK deficiency.