Chronic myeloid leukemia (CML) is derived from a stem cell, and it is widely accepted that the existence of leukemia stem cells (LSCs) is one of the major reasons for the relapse of CML treated with kinase inhibitors. Key to eradicating LSCs is to identify genes that play a critical role in survival regulation of these stem cells. Using BCR-ABL-induced CML mouse model, here we show that expression of the stearoyl-CoA desaturase 1 (Scd1) gene is downregulated in LSCs and that Scd1 plays a tumor-suppressive role in LSCs with no effect on the function of normal hematopoietic stem cells. Deletion of Scd1 causes acceleration of CML development and conversely overexpression of Scd1 delays CML development. In addition, using genetic approaches, we show that Pten, p53, and Bcl2 are regulated by Scd1 in LSCs. Furthermore, we find that induction of Scd1 expression by a PPARγ agonist suppresses LSCs and delays CML development. Our results demonstrate a critical role for Scd1 in functional regulation of LSCs, providing a new anti-LSC strategy through enhancing Scd1 activity.