SALL4 is aberrantly expressed in human myelodysplastic syndromes (MDS) and acute myeloid leukemia (AML). We have generated a SALL4 transgenic (SALL4B Tg) mouse model with pre-leukemic MDS-like symptoms that transform to AML over time. This makes our mouse model applicable for studying human MDS/AML diseases. Characterization of the leukemic initiation population in this model leads to the discovery that Fancl (Fanconi anemia, complementation group L) is downregulated in SALL4B Tg leukemic and pre-leukemic cells. Similar to the reported Fanconi anemia (FA) mouse model, chromosomal instability with radial changes can be detected in pre-leukemic SALL4B Tg bone marrow (BM) cells after DNA damage challenge. Results from additional studies using DNA damage repair reporter assays support a role of SALL4 in inhibiting the homologous recombination pathway. Intriguingly, unlike the FA mouse model, after DNA damage challenge, SALL4B Tg BM cells can survive and generate hematopoietic colonies. We further elucidated that the mechanism by which SALL4 promotes cell survival is through Bcl2 activation. Overall, our studies demonstrate for the first time that SALL4 has a negative impact in DNA damage repair, and support the model of dual functional properties of SALL4 in leukemogenesis through inhibiting DNA damage repair and promoting cell survival.