t(8;21) is one of the most frequent chromosomal translocations occurring in acute myeloid leukemia (AML) and is considered the leukemia-initiating event. The biologic and clinical significance of microRNA dysregulation associated with AML1/ETO expressed in t(8;21) AML is unknown. Here, we show that AML1/ETO triggers the heterochromatic silencing of microRNA-193a (miR-193a) by binding at AML1-binding sites and recruiting chromatin-remodeling enzymes. Suppression of miR-193a expands the oncogenic activity of the fusion protein AML-ETO, because miR-193a represses the expression of multiple target genes, such as AML1/ETO, DNMT3a, HDAC3, KIT, CCND1, and MDM2 directly, and increases PTEN indirectly. Enhanced miR-193a levels induce G(1) arrest, apoptosis, and restore leukemic cell differentiation. Our study identifies miR-193a and PTEN as targets for AML1/ETO and provides evidence that links the epigenetic silencing of tumor suppressor genes miR-193a and PTEN to differentiation block of myeloid precursors. Our results indicated a feedback circuitry involving miR-193a and AML1/ETO/DNMTs/HDACs, cooperating with the PTEN/PI3K signaling pathway and contributing to leukemogenesis in vitro and in vivo, which can be successfully targeted by pharmacologic disruption of the AML1/ETO/DNMTs/HDACs complex or enhancement of miR-193a in t(8;21)-leukemias.