Previously, we identified SETD2 loss-of-function mutations in 22% of MLL-rearranged (MLLr) acute leukemia patients, implicating a mechanism for cooperativity between SETD2 mutations and MLL fusions. However, the detailed mechanism of how SETD2-H3K36me3 downregulation accelerates MLLr leukemia remains unclear. Here, we show that in MLLr leukemia, both H3K79me2 and H3K36me3 are aberrantly elevated and co-enriched in a group of genes. SETD2 inactivation leads to a global reduction of H3K36me3 and a further elevation of H3K79me2, but does not change the expression of known MLL fusion target genes. Instead, this pattern of histone changes is associated with transcriptional deregulation of a novel set of genes; downregulating tumor suppressors (for example, ASXL1) and upregulating oncogenes (for example, ERG). Taken together, our findings reveal a global crosstalk between the oncogenic DOT1L-H3K79me2 axis and the tumor suppressive SETD2-H3K36me3 axis in gene regulation, provide molecular insights into how SETD2 mutations accelerate MLLr leukemogenesis through differential regulation of additional tumor suppressors and oncogenes.