Transposable elements or transposons are major players in genetic variability and genome evolution. Aberrant activation of long interspersed element-1 (LINE-1 or L1) retrotransposons is common in human cancers, yet their tumor-type-specific functions are poorly characterized. We identified MPHOSPH8/MPP8, a component of the human silencing hub (HUSH) complex, as an acute myeloid leukemia (AML)-selective dependency by epigenetic regulator-focused CRISPR screening. Although MPP8 is dispensable for steady-state hematopoiesis, MPP8 loss inhibits AML development by reactivating L1s to induce the DNA damage response and cell cycle exit. Activation of endogenous or ectopic L1s mimics the phenotype of MPP8 loss, whereas blocking retrotransposition abrogates MPP8-deficiency-induced phenotypes. Expression of AML oncogenic mutations promotes L1 suppression, and enhanced L1 silencing is associated with poor prognosis in human AML. Hence, while retrotransposons are commonly recognized for their cancer-promoting functions, we describe a tumor-suppressive role for L1 retrotransposons in myeloid leukemia.