Acute leukemia characterized by chromosomal rearrangements requires additional molecular disruptions to develop into full-blown malignancy^,, yet the cooperative mechanisms remain elusive. Using whole-genome sequencing of a pair of monozygotic twins discordant for MLL (also called KMT2A) gene–rearranged leukemia, we identified a transforming MLL-NRIP3 fusion gene and biallelic mutations in SETD2 (encoding a histone H3K36 methyltransferase). Moreover, loss-of-function point mutations in SETD2 were recurrent (6.2%) in 241 patients with acute leukemia and were associated with multiple major chromosomal aberrations. We observed a global loss of H3K36 trimethylation (H3K36me3) in leukemic blasts with mutations in SETD2. In the presence of a genetic lesion, downregulation of SETD2 contributed to both initiation and progression during leukemia development by promoting the self-renewal potential of leukemia stem cells. Therefore, our study provides compelling evidence for SETD2 as a new tumor suppressor. Disruption of the SETD2-H3K36me3 pathway is a distinct epigenetic mechanism for leukemia development.