Translocations producing rearranged versions of the transcription factor double homeobox 4 (DUX4-r) are one of the most frequent causes of B cell acute lymphoblastic leukemia (B-ALL). DUX4-r retains the DNA binding domain of wild-type DUX4 but is truncated on the C-terminal transcription activation domain. The precise mechanism through which DUX4-r causes leukemia is unknown, and no targeted therapy is currently available. We found that the rearrangement leads to both a loss and a gain of function in DUX4-r. Loss of CBP/EP300 transcriptional coactivator interaction leads to an inability to bind and activate repressed chromatin. Concurrently, a gain of interaction with the general transcription factor 2 I (GTF2I) redirects DUX4-r toward leukemogenic targets. This neomorphic activity exposes an Achilles' heel whereby DUX4-r-positive leukemia cells are exquisitely sensitive to GTF2I targeting, which inhibits DUX4-r leukemogenic activity. Our work elucidates the molecular mechanism through which DUX4-r causes leukemia and suggests a possible therapeutic avenue tailored to this B-ALL subtype.