Epigenetic mechanisms regulating leukemia stem cells (LSCs) are an attractive target for therapy of blood cancers. Here, we report that conditional knockout of the DNA methyltransferase Dnmt1 blocked development of leukemia, and haploinsufficiency of Dnmt1 was sufficient to delay progression of leukemogenesis and impair LSC self-renewal without altering normal hematopoiesis. Haploinsufficiency of Dnmt1 resulted in tumor suppressor gene derepression associated with reduced DNA methylation and bivalent chromatin marks. These results suggest that LSCs depend on not only active expression of leukemogenic programs, but also DNA methylation-mediated silencing of bivalent domains to enforce transcriptional repression.