Transient abnormal myelopoiesis (TAM) is a clonal preleukemic disorder that progresses to myeloid leukemia of Down syndrome (ML-DS) through the accumulation of genetic alterations. To investigate the mechanism of leukemogenesis in this disorder, a xenograft model of TAM was established using NOD/Shi-scid, interleukin (IL)-2Rγ(null) mice. Serial engraftment after transplantation of cells from a TAM patient who developed ML-DS a year later demonstrated their self-renewal capacity. A GATA1 mutation and no copy number alterations (CNAs) were detected in the primary patient sample by conventional genomic sequencing and CNA profiling. However, in serial transplantations, engrafted TAM-derived cells showed the emergence of divergent subclones with another GATA1 mutation and various CNAs, including a 16q deletion and 1q gain, which are clinically associated with ML-DS. Detailed genomic analysis identified minor subclones with a 16q deletion or this distinct GATA1 mutation in the primary patient sample. These results suggest that genetically heterogeneous subclones with varying leukemia-initiating potential already exist in the neonatal TAM phase, and ML-DS may develop from a pool of such minor clones through clonal selection. Our xenograft model of TAM may provide unique insight into the evolutionary process of leukemia.