A growing body of data suggests the importance of epigenetic mechanisms in cancer. Polycomb repressive complex 2 (PRC2) has been implicated in self-renewal and cancer progression, and its components are overexpressed in many cancers. However, its role in cancer development and progression remains unclear. We used conditional alleles for the PRC2 components enhancer of zeste 2 (Ezh2) and embryonic ectoderm development (Eed) to characterize the role of PRC2 function in leukemia development and progression. Compared with wild-type leukemia, Ezh2-null MLL-AF9-mediated acute myeloid leukemia (AML) failed to accelerate upon secondary transplantation. However, Ezh2-null leukemias maintained self-renewal up to the third round of transplantation, indicating that Ezh2 is not strictly required for MLL-AF9 AML, but plays a role in leukemia progression. Genome-wide analyses of PRC2-mediated trimethylation of histone 3 demonstrated locus-specific persistence of H3K27me3 despite inactivation of Ezh2, suggesting partial compensation by Ezh1. In contrast, inactivation of the essential PRC2 gene, Eed, led to complete ablation of PRC2 function, which was incompatible with leukemia growth. Gene expression array analyses indicated more profound gene expression changes in Eed-null compared with Ezh2-null leukemic cells, including down-regulation of Myc target genes and up-regulation of PRC2 targets. Manipulating PRC2 function may be of therapeutic benefit in AML.