Members of the new PEBP2 (Polyomavirus Enhancer Binding Protein 2) family of heterodimeric transcriptional regulatory protein are composed of two subunits, alpha and beta. One of the genes encoding the alpha subunit, AML1/PEBP2 alpha B, was identified at the breakpoints of various chromosome translocations, including t(8;21) and t(12;21) associated with acute myeloid leukemia and acute lymphoblastic leukemia, respectively. The gene encoding the beta subunit (PEBP2 beta/CBFB) was also shown to be the target of the inversion of chromosome 16, another chromosomal anomaly associated with acute myeloid leukemia. Targeted disruption of either the Aml1/Pebp2 alpha B or Pebp2 beta/Cbfb gene resulted in strikingly similar phenotypes such as lack of definitive hematopoiesis of the fetal liver and accompanying hemorrhage of the central nervous system. These observations suggest that both alpha and beta subunits of PEBP2 are indispensable for its in vivo function. However, the heterodimerization of the alpha and beta subunit does not seem to occur readily suggesting that their capacity to associate might be an important rate limiting step in PEBP2 site-dependent transcription regulation. In this review, we concentrate on the possible regulatory mechanisms of PEBP2 activity in relation to leukemogenesis.