Mutation in nucleophosmin (NPM1) causes relocalization of this normally nucleolar protein to the cytoplasm ( NPM1c+ ). Despite NPM1 mutation being the most common driver mutation in cytogenetically normal adult acute myeloid leukemia (AML), the mechanisms of NPM1c+-induced leukemogenesis remain unclear. Caspase-2 is a pro-apoptotic protein activated by NPM1 in the nucleolus. Here, we show that caspase-2 is also activated by NPM1c+ in the cytoplasm, and DNA damage-induced apoptosis is caspase-2-dependent in NPM1c+ AML but not in NPM1wt cells. Strikingly, in NPM1c+ cells, loss of caspase-2 results in profound cell cycle arrest, differentiation, and down-regulation of stem cell pathways that regulate pluripotency including impairment in the AKT/mTORC1 and Wnt signaling pathways. In contrast, there were minimal differences in proliferation, differentiation, or the transcriptional profile of NPM1wt cells with and without caspase-2. Together, these results show that caspase-2 is essential for proliferation and self-renewal of AML cells that have mutated NPM1. This study demonstrates that caspase-2 is a major effector of NPM1c+ function and may even be a druggable target to treat NPM1c+ AML and prevent relapse.